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USDCAD Supported by Ichimoku – Forex Trading Strategy


Dec.04.2016

USDCAD Supported by Ichimoku

After a crazy weekend for Mr. Euro and our Pizza-loving friends in Italy, Ms. USA is now trying to back on her feet with USDCAD supported by Ichimoku. It is that time of the month to take an IDDA approach to develop a trading strategy for Mr. Loonie as he dances against Ms. USA on the forex dance floor.

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Technical Analysis | USDCAD Supported by Ichimoku

Daily Chart: For the third time since October 24th, the USD/CAD pair failed to break below the previous-resistance-now-turned-into-support which is also the 38% Fibonacci retracement level of 1.3250. Not only that, the upward-moving prevailing Ichimoku cloud is now also acting as a support. We also have a third bullish technical signal, a bullish engulfing which formed right at the beginning of Monday's Asian session.

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The only downside to all these bullish indications is another Ichimoku element which is raining on our parade: The Tenkan line just crossed below the Kijun line.

USDCAD Supported by Ichimoku Cloud - Daily Chart Technical Analysis USDCAD Supported by Ichimoku Cloud - Daily Chart Technical Analysis

 

End of November the pair hit the 50% Fibonacci level on its way up and it is likely that this level will become the resistance once again in December.

Monthly Chart:  We are getting yet another set of mixed signals on the monthly chart. While USDCAD is supported by the monthly Ichimoku cloud, November's indecisive candlestick is now followed by a bearish engulfing beginning of December.

USDCAD Supported by Ichimoku Cloud - Monthly Chart Technical Analysis USDCAD Supported by Ichimoku Cloud - Monthly Chart Technical Analysis

On the other hand you can argue that the month is still young.

Fundamentals | USDCAD Supported by Ichimoku

US Side: On the bright side, employers in the U.S. added 178,000 non-farm jobs in November. The unemployment rate dropped to 4.6% from 4.9%. This marks the 74th consecutive month of job growth.

On the downside, November non-farm payrolls missed the 180K expectation. Employment was a miss, and wage growth was an even bigger miss. With that, even though the overall labor market seems to be on the right track, the speculative traders reacted in a negative way to the news on Friday.

 

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In terms of rate hike expectations, however, it cemented the idea of a December rate hike. After all the 178K reading may have been a miss, but it’s still way above the 100K “floor” that many Fed officials have their eyes on.

Canada's Side: Canada's jobs report did better on Friday as their unemployment rate came in at 6.8% versus 7% expected.

However the main driver of Mr. Loonie was the OPEC deal last week. Oil prices sky-rocketed as OPEC announced production cuts. And this of course drove USD/CAD pair down.

 

Coming up on the economic calendar...

BoC Interest Rate Decision on Wednesday at 2 PM GMT could create yet another shake in the Loonie crosses.

Coming up during today’s London session we have Spanish, Italian, French, German and the UK services PMI between 8:15 AM and 9:30 AM GMT which could create further volatility in the EUR and GBP crosses.

The US is set to release their Non-Manufacturing PMI at 3 PM GMT.

 

Market Sentiment | USDCAD Supported by Ichimoku

 

Mixed market sentiment as of Monday's Sydney session.

Trading Strategy | USDCAD Supported by Ichimoku

Putting the technical, fundamental and sentimental points of the IDDA approach together, we could consider going for a short to medium-term position in the USD/CAD pair. Please visit out Premium Facebook Group for detailed strategy.

As always, when in doubt, book a private session with me to get your portfolio on track.

 

Here are Invest Diva's calculations for important approximate levels to keep an eye on:

Support Levels Turning Point Resistance Levels
1.27 1.3250 1.3525
1.30 1.34 1.3750

 

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 xoxo

Kiana 喜愛成
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