Last week, we favored a short below the top of the established range below 1.0252. The range top held up to erratic swings in sentiment towards the Greenback as USDCAD continued to dance to its own beat, seemingly oblivious to the other majors. Our short bias yielded over 150 pips in profit as the pair dropped back in the middle of the range towards the parity level.
Currently, we see an upward-sloping trend line connecting the lows since the end of February. Previous oscillations inside the range have led to periods of congestion as price action works itself lower. There are no candlestick formations that stand out at the moment. We will opt to take profit on our USDCAD short trade here, holding off taking additional positions until the pair breaks past the trend line. That said our bias remains bearish.
USD/CAD Strategy
1. Short USDCAD on a daily close below trend line support (currently near 1.0026).
2. If entry conditions are met, a viable stop-loss level would lie near 1.0103, just above last week’s close.
3. Following the trend line break, we are targeting the bottom of the range.
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