FX.co ★ Trading forecast USD/CAD 05.02.2018

At the end of last week, there were signs of growth for the USD/CAD pair, which allowed to offset the massive decline two weeks ago. This indicates an increase in the probable forming of the medium-term accumulation zone.

Medium-term plan.

The sharp growth of the pair requires considering the option to change the downward momentum. In order for this to happen, a breakdown and fastening above the weekly control zone (KZ) 1.2466-1.2446 which acts as the determining resistance is required. If the trend continues to trade lower this zone, and its test leads to the emergence of a large offer, the downward momentum will resume. As an example, the weekly KZ can be tested in early January, where a sharp increase is expected, stopped by a weekly KZ.

It is important to understand that the consolidation above the level of 1.2466 will allow considering the growth to the monthly KZ of 1.2691-1.2649. Therefore, purchases will acquire the status of medium-term, but sales will not gain a favorable risk/profit ratio.

Intraday plan.

On Friday, the formation of a reversal pattern occurred after the pair was fixed above the NKZ 1/2 1.2355-1.2346 after the closing of the American session. This indicates a 70% probability for testing the weekly KZ of 1.2466-1.2446. The reduction in the exchange rate should be used to find favorable prices for the purchase of the instrument. The determining support is the NKZ 1/2 1.2333-1.2326. While the pair is trading above this zone, the upward movement will remain impulsive. Testing the weekly KZ requires closing most of the purchases and expect a response to the zone.

Daytime CP is the daytime control zone. The zone formed by important data from the futures market, which change several times a year.

Weekly CP is the weekly control zone. The zone formed by important futures market marks, which change several times a year.

Monthly CP is the monthly control zone. The zone is a reflection of the average volatility over the past year.

* The presented market analysis is informative and does not constitute a guide to the transaction.