For our free forex signals, today we have the USDCAD instrument, in which we recommend a buy. See the entry and stop levels below.
The US dollar continues to give back some of last week’s gains after the dovish assessment coming out of the Fed’s FOMC meeting. But the bulls are also being held back by economic data that is sending out mixed signals.
Nevertheless, this period of consolidation should not be taken as the end of the long game for the US dollar, hence we eye a short-term buy opportunity in USD/CAD.
US jobless claims came in at 411k but that was ahead of market expectations that had pencilled 380k, suggesting that some of the steam might be coming out of the bounce back.
The durable goods reading didn’t provide much joy either. It showed growth of 2.3% which would have been very good for normal conditions, but the market had been expecting a number closer to 2.8% to confirm the reflation trade.
Up at 13:30 EST is the US Price Consumption Expenditure Index (PCE) Index, Core PCE and Personal Income and Spending. Traders will looking for further signs to gauge how not the economy is running to inform their next moves in the market.
USD/CAD forecast: Canadian dollar to give back some gains
Meanwhile, the Canadian dollar continues to firm against the US buck, helped by strong economic data. The country’s closely watched Trade Confidence Index is now at a 20-year high, while manufacturing activity expanded by 1.0%.
The good news on the manufacturing side was in sharp contrast to the April data that showed a contraction of 2.1%. The gyrations reflect the different lockdown situations.
The Covid vaccine rollout continues at pace, with 58.7% of the the population (19.5 million) 12 and older having been partially vaccinated in Canada.
Wholesale Sales were up 1.1 month on month.
Crude oil price slips, hurts CAD
However, the key driver of Canadian dollar strength continues to be the surging price of crude oil, which is currently trading at three year highs.
WTI crude is currently price at $73.06 and is down 0.34% in the session at the time of writing
Crude oil is a key Canadian export and can range in value from between 11% up to 20% of total exports.
With crude oil off a little so far today, traders may take that as an excuse to pocket some profits on CAD, which will help USD/CAD.
Now let’s get to the price signal:
Free forex signals USDCAD – Buy
Instrument: USDCAD
Order: BUY-STOP
Entry price: 1.2345
Stop Loss: 1.2249
TP1: 1.2484
Recommended Risk: 1%
Risk / Reward Ratio: 1:1.45
Signal validity period: Good until cancelled
Get Free Forex Signals – 82% Win Rate!
3 Free Forex Every Week – Full Technical Analysis
Share
