In this write-up, we attempt to establish a USDCAD bullish trade setup contemplating technical charting and candlestick patterns coupled with some important indicators.
USDCAD formed hammer and bullish engulfing candles on both daily and monthly terms.
Hammer and Bullish Engulfing candles have been traced out at 1.3341 and 1.3421 levels respectively (on daily plotting) that has also signaled strength in upswings of this pair.
These patterns have occurred at 1.2463 and 1.2828 levels on monthly terms also.
Most importantly, these bullish patterns have developed the ascending channel pattern in the minor trend. The pair has tested channel support at 1.3112 levels, consequently, the current price has spiked well above DMAs with bullish crossovers. Similarly, it has tested uptrend support at 1.2782 levels to spike above EMAs on monthly terms.
While both leading oscillators ( RSI and Stochastic curves) show upward convergence to indicate the strength in the uptrend and the intensified buying momentum.
To substantiate this buying sentiment, bullish DMA & MACD crossovers also indicate the upswings to prolong further.
Hence, the prevailing uptrend is most likely to prolong further up to the next stiff resistance of 1.3638 levels.
Trade Tips: One daily trading grounds, at spot reference: 1.3435 levels, we advocate executing double-touch call options strategy with a view of participating in the prevailing rallies, use upper strikes at 1.3519 levels, that means the strategy for 75-85 pips is likely to fetch leveraged yields as long as the underlying price keeps spiking towards upper strikes on the expiration.
Alternatively, contemplating above technical rationale on a broader perspective, we advocated initiating longs in USDCAD futures contracts of May’19 delivery for the major uptrend. We now continue to uphold the same strategy by rolling over with June deliveries ahead of BoC’s monetary policy that is scheduled for this week.
Currency Strength Index: FxWirePro's hourly CAD spot index is flashing at -28 (which is mildly bearish ), while hourly USD spot index was at -107 ( bearish ) while articulating at 06:01 GMT .
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