USD/CAD shooting star causes gap down opening to send early signal of slumps, major trend in rising channel intact – Trade tunnel spread:
USDCAD’s shooting star plummets prices below 21-DMAs with gap-down opening pattern. Consequently, more slumps possible as the bears are intensified with momentum indicators signaling overbought pressures. (refer daily chart ).
While the major trend of USDCAD has been spiking through rising channel pattern which is bullish in nature, shooting star pops-up at channel resistance and hammer pattern at channel supports. For now, rallies spike above 7EMAs on strong channel support, strength in uptrend is in conformity to the momentum oscillators ( RSI & stochastic curves).
Trade tips: Contemplating prevailing bearish sentiments of this pair, the current spot reference is hovering below 21-DMA levels, it is wise to trade tunnel spread options strategy using strikes of 1.3211 levels and lower strikes at 1.3141 levels to attain exponential yields.
As we could foresee upside risks in the weeks to come, on hedging grounds, we advocate initiating longs in USDCAD futures contracts of mid-month tenors with a view to arresting further upside risks.
Currency Strength Index: FxWirePro's hourly CAD spot index is flashing at -66 levels (which is bearish ), while hourly USD spot index was at 58 ( bullish ) while articulating at (07:53 GMT ).
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