USDCAD is still trading inside the rising channel on its 1-hour time frame and may be give buy forex signals and resume the climb if it finds support at the bottom of the channel near the 1.0850 minor psychological level.
Stochastic is already in the oversold zone, hinting that a forex signals suggest a bounce could take place soon. If you’re bearish on this pair though, you could still catch the selling momentum from its current levels until the bottom of the channel since the stochastic hasn’t crossed upward yet.
On the other hand, if you’re looking to follow the ongoing uptrend, you could set a buy order at the channel support and aim for the top above the 1.0950 minor psychological level. With a tight stop, this could yield a 2:1 return on risk for a day trade.
Forex Signals and Outlook
It is often said that the Canadian economy just takes its cue from the US, which means that improvements in the US economy are usually followed by strong Canadian data. However, the latest jobs release suggests that this is no longer the case.
Buy forex signals for the USDCAD pair popped up when the US printed a strong NFP while the Canadian economy churned out disappointing jobs data. A bigger picture perspective shows that Canada is lagging with only 0.5% in jobs growth on an annualized basis, with the US showing a 1.7% pickup.
There are no major reports due from both economies this week, which suggests that the ongoing uptrend may continue and forex signals could take place at the bottom of the uptrend channel. Bear in mind that the Fed hasn’t wavered from its taper plans while the BOC has recently expressed concern about weakening inflation pressures, which led them to maintain a cautious monetary policy stance.
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