Forex Marketz Daily Forex News – Fully Markets Update
Three points to consider:
- US Dollar looking to rally after testing the channel floor.
- Waiting on oil inventories before entering a long USD trade.
- Trade Strategy: Stand Aside
The USD/CAD Forex market is trying to spark some upward momentum. This is happening after the US Dollar fell briefly to test the channel floor at 1.30/31. If you recall, I had a long USD trade open at 1.3248 which I had to jump out of after the Canadian Dollar reacted to a sudden spike in crude oil prices. However, this move has proven to be corrective and not long lived.
Technical Analysis
First, let’s look at today’s USD/CAD technical analysis. There is near term resistance at the end of a small cluster area. This area starts at the August 25 high at 1.3351 and ends at 1.3404/05. A daily close above this technical level (and channel top) challenges the technical resistance at 1.3585. The alternative USD/CAD technical analysis, should the US Dollar move lower, notes support near the August 31 low (channel floor) at 1.3115. A break below this technical barrier challenges the sing bottom at 1.2950 (August 12).
Trade Strategy
Now let/s look at the USD/CAD trade strategy for today. It is very tempting, from a risk to reward angle, to enter a long US Dollar trade at this time. The long term trend favors a bullish USD. However, we have a risk event on the economic calendar which is giving me pause. The Canadian Dollar is very susceptible to oil related news and the with inventory data due out soon, I will opt to stand aside and be patient. Once this event passes I will commit to a directional bias and look to enter a long USD trade at my first opportunity.