USD/CAD - Daily
Our expectations: Technically, the pair is in ascending trend after activating the flag formation in the upward direction. But the flag is unlikely to be fulfilled. Negotiations on NAFTA are all the better, just minutes ago, even Trump himself confirmed this. The accumulated CAD negativity has pushed the dollar down in recent months, as Bank Of Canada has taken a more cautious stance on monetary policy tightening. As soon as it became clear that a deal is likely to be available by the end of the week, investors are accumulating the fund by betting on massive CAD purchases.
What are the opportunities a front of USD/CAD from now on?
The most likely scenario is a test of the support zone formed by the previous two bottoms 38.2% Fibonacci correction of the main trend and 200SMA. When signing a deal I expect the decline to deepen and see a breakthrough in the main upward trend. 50 and 200SMA remain beached while Sequential feeds to start a new bearish pulse, counting down from the bottom. DeMarker stays in a neutral zone pointing down.
Entry short of current levels would be risky due to the fact that the price is already too low. The winning strategy is to wait for a short-term correction in the upward trend, then to position SL shorts over the last top.
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