Counter-trend opportunity in USD/CAD?
One of the most persistent trends of the past few months has been in USD/CAD. A lot of the general advance in the exchange rate has been blamed on the weakness in WTI over the past few months, but not even last week's 30% rise in the commodity could knock the pair down by more than a couple of big figures. I say all this to demonstrate just how strong this trend really is. Now with that said, I think USD/CAD is nearing some interesting levels where a counter-trend move could try and materilaize. Over the next week a few things will be converging in the 1.3450 area including the 61.8% retracement of the 2002 – 2007 decline (which is obviously static) and the median line from the last year’s July low. The pitchfork drawn from the July 2014 low has already proven useful as the recent June low came from right around the lower parallel. The median line has yet to be tested, but spot has come close several times over the past few weeks and there does seem to be a bit of a natural attraction there. Any clear failure around this convergence zone especially over the next few days should set up an interesting potential counter-trend opportunity.
Looking to sell USD/CAD on a failure around 1.3450. A daily settlement over 1.3485 would force a re-think.
Still short USD/JPY from around 121.50. Took profit on some. Moving stop to cost on rest.
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