This week was not the most memorable thing the market has seen in terms of. Of course, there were trading opportunities, but the big moves were mostly missing. I hope they traded in gold this week. It was definitely one of the best tools to trade and has produced a decent rebound in the last few trading days. Before we look at gold, let’s first look at some FX pairs.
USD / CAD – fluctuating trading
What can I say about USD / CAD? Mmmm… This is a trick. I was hoping to see a convincing fracture of the neckline in the figure above. If you had read my article , you would have seen this chart:
This screenshot was taken on Wednesday at the meeting minutes were released. The Canadian dollar performed very poorly at this stage and further weakening against the US dollar seemed likely.
As you can see in the first figure, the USD / CAD technique suddenly changed. The pair is now below both the 200-day moving average and the 20-day exponential moving average. The few positive things we can now say about this pair is that today’s candle shows some bullish rejection in the “strong support” zone, indicated by the blue and yellow squares in the very first chart of the article.
Here we need to ask for help and perspective from the weekly time frame. You see, we have a little problem here. The pair is currently still supported, but is trading below the two moving averages just mentioned, suggesting weakness. Let’s look at the weekly chart:
Here we see a weekly candle that we can’t afford to ignore – a needle candle rejects the 20-week exponential moving average. Straight bearish sign. It looks more and more like a bear, wouldn’t you?
Something else I noticed today (Friday) is that the Canadian dollar is relatively strong at the moment when we compare its performance against the U.S. dollar to that of some other major currencies against the U.S. dollar. For example, the pound and the Australian dollar were hammered by the U.S. dollar today, while the Canadian dollar actually appreciated against the U.S. dollar, even though it wasn’t much. The euro and the Swiss franc also depreciated against the dollar, though not as aggressively as the pound and the Aussie.
To put it this way, the Canadian dollar is generally strong right now, and the technical data has undergone a significant change over the past two days. If you’re at a long exposure to the USD / CAD, you need to be careful here, and maybe there’s a good opportunity to shorten this pair in the coming weeks. Let’s look at a trading setting on the weekly chart:
The short entry must be made when the signal candle is retracted 50% (last candle in the table). The stop loss is a few seeds above the top of the candle and the takeover gain should be set to 1.28274, which is a little more than three times the distance of the stop loss. This is an aggressive trading setting. If you want to trade with a larger confirmation, you can always replace the low level of the signal candle with a stop loss above the peak of the candle. However, this will require a larger stop loss and will limit your potential profit target.
The first major event next week you need to know is this speech by new US President Donald Trump on Tuesday at 21:00 GMT. This is extremely important because financial markets are really sensitive to what you say.
The second high-level event risk will arrive in the form of an interest rate decision at the Bank of Canada (BoC) on Wednesday at 15:00 GMT. This can move the Canadian dollar vigorously. You will have to hold a press conference or speech with BoC Governor Stephen Poloz to accompany the interest rate decision, which could easily cause more volatility than the decision itself. The BoC is expected to keep its exchange rate unchanged at 0.5%, but let’s see what happens on Wednesday.
The price of gold is still climbing. After another impressive day of trading, this precious metal is worth $ 1,255.97 per fine ounce. As I mentioned earlier, this has been an excellent tool for trade over the past week, due to its fair upward movement. This matters because many FX pairs traded roughly sideways during the same period. I am very pleased that we have recently started to provide trading signals on gold as I consider this commodity to be an important financial instrument that often results in good volatility and can be an excellent complement to any portfolio.
The black horizontal line in the chart above indicates an important level of momentum where we can look for buying signals in the coming days and weeks. However, the price is not guaranteed to revisit this level, but hopefully it will.
EUR / USD – Just pulled the trigger
Today’s candle, which rejected 20-EMA, is, in my opinion, a really attractive selling sign. The fact that this candle closed below its opening price also increases the strength of this signal. A few minutes ago, I placed two market orders for different purposes. Stop losses are a few heights higher than today’s peak. I also placed a sell limit order at today’s candle’s 50% retracement level, also with a stop loss above today’s peak. If you want to trade this pair next week, you will still have the opportunity to take advantage of this setting.