Simon Alagbe analyzes USD/CAD on May 6, 2020, identifying two trade setups: a bullish buy-stop at 1.41120 with 30-pip profit target, or a bearish sell-stop at 1.3798 targeting the 50% retracement. The ADP employment report, expected to show 27k jobs lost, is the day's key economic event.
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Good day, welcome to Rally Academy's daily market analysis. My name is Alagbe Simon, a market analyst with Rally Academy. Um, today, the 6th of May in the year 2020, we will be looking out for trading opportunity on USD/CAD. Okay, so this is the instruments on the 4-hour time frame. And then from what we can see here, we'll see that USD/CAD is currently supported by the 50-period exponential moving average after bouncing off the 38.2 retracement level. But if we look closely, we would see that the instrument has been trading within this range. So that means we should be looking out to have trades whenever it's able to, um, get to somewhere around this level, and then we can have our take profits before the 23.6 retracement level, which is the more prominent high on this instrument on the 4-hour chart. But for us to be able to pick our entry points accurately Let's, um, check on the 1-hour time frame. Okay, so this gives us, um, a better view on the 1-hour time frame. You can still see, um, the range on the instruments, the one we drew on the 4-hour chart. So a breakout either to the upside or to the downside. Um, for the downside, a sell trade will be in order when the instrument is able to go below the moving average go below the 38.2, and then it's trading around this price level. So from this price level till, um, the next Fibonacci retracement level, which is at this price level, will be a target for our take profit. So we have our entry point at this price level, and then our take profit 20, 30, 40, 50 pips. Depending on what we want to make from the market. But the resistance is around 134 pips from this entry price, so we can have this and then target 23.6. I will suggest we just target around 20, 30, 40 pips from this entry point. So let's quickly, um, place some trade in line with the expectation of the movement. On this instrument, any moment from now. So we come to a new order and then adjust the volume depending on our balance. Then we come to instant execution, move to pending order because we're expecting USD/CAD to continue to trade bullish. Once it's able to go outside of this range, that means we'll be going for a buy stop. At this price level, that's 1.41120. And then we have our take profit 30 pips away, that's 1.41420. So place that 30 pips away take profit from our entry point. We can have ours wider than this depending on our target on the trade. And then for the other direction, peradventure the instrument turns to the downside and is able to go below the moving average which is currently supporting price, as well as, um, the 38.2 retracement level then you should be looking at having a sell trade from this price level and then have our take profit before the 50% retracement level at 1.38017. So we also do the same thing, the other— we have our execution type as pending, but this time around we'll be having a sell stop at price level 1.39 7, 9, 8. And then our take profit, 30 pips away, is 1.39498. Yeah, so we have our entry points, then we have our take profits at this price level. Let's also check on the fundamental front. Any economic data expected on this instrument today. So we go to, um, forexfactory.com. So today the only economic data with bearing on USD/CAD is the ADP non-farm employment change. So this data measures the total number of people that are employed outside the farming industry and government last month. We all know the way the coronavirus has been affecting the labor market, especially in the US, with over 30 million persons losing their job in the last 6 weeks. Um, the forecast this time around is slightly better than what we had last month, which was 27,000. So about 27,000 persons lost their job the previous month. That was 2 months ago, and data came out last month. And the one we are expecting today will be giving us the total number of persons in the private sector that ordinarily ought to have been employed, but this time around, as a result of the impact of the novel virus will likely have some— the number of persons who have lost their job last month in the US. So we should be expecting, um, a data that would be slightly better than the previous, but I don't know how close it will be to this forecast. Will it be lower than the forecast or will it be higher? By 1:15 PM today, we'll be getting that and would know if the dollar would gain more strength by virtue of a very good data by that time. So let's, um, take advantage of all this opportunity on USD/CAD today and then make some very good money for ourselves. Thank you.
