In today’s live trading session, we went over the Canadian monetary policy statement and its consequent effects on the Forex market. We then spent the rest of the session looking for trades to take to finish the week off.
This morning the Bank of Canada revealed that it had no plans of changing its interest rate from 0.25%. The rate has been at 0.25% since the first wave of Covid-19. Despite the lack of a surprise, the Loonie dominated during the New York session. For one, EURCAD took a tumble against the Loonie with the price falling 0.67% in a mere three hours. We expect this downside to continue as technical analysis seems to support this move.
As for trades to take to end the week, there are plenty! We just need the markets to get out of their current rut and activate them. We are still waiting for Gold to break above 1815, to take the precious metal higher. Another promising setup we are waiting for is a sell on USDCAD. The pair had recently completed a head-and-shoulders pattern but has shown reluctancy to break its neckline. With bearish forecasts for tomorrow’s US Core Retail sales, we may have this move completed then. In addition to these two setups, we are also eyeing NZDJPY and GBPAUD.
As much of the week consisted of monetary policy statements, there were long bouts of consolidation (ex. Gold). The goal for these types of weeks is to end it in profit, regardless of how small or large. We believe the current market is behaving this way due to the uncertainty with the US Dollar. Every other day it goes from being bearish to bullish. Once the US Dollar chooses a clear path, market conditions will return to normal. As always, be safe and trade responsibly!
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