USDCAD Forex Technical Analysis June 02, 2014

By IFCMarkets

Good afternoon, dear traders. Today, we expect the ISM Non-manufacturing PMI to come out at 16:00 (CET, server time). The index is published by the U.S. Institute of Food Supply on monthly basis. The ISM index is the result of monthly survey of purchasing managers in non manufacturing sector. The survey includes more than 400 companies. The managers are asked regarding employment, price levels, suppliers, stocks of non manufacturing facilities. If the index turns out below 50, due to lower activity, that indicates the economic downturn, especially when the trend continues for several months. For today, the growth rate is projected to be from 54.9% to 55.7%. If the actual value falls below the forecast, we will open a pending sell order.

Here we consider the USD/CAD on the H4 chart. The H4 and the D1 trends are influenced by the bears. The price movement direction is confirmed by the ParabolicSAR and the by the PivotPoints channel direction. It should also be noted that the price crossed the Pivot signal line immediately after the “shooting star” formation (marked in yellow on the chart). It is important to note that there is the RSI-Bars divergence observed at the moment. So it is necessary to wait for the oscillator trendline to be violated downwards.

The comfortable level for placing a pending sell order is located at 1.08126. This fractal level, coincides with the first PivotPoints support. The SL is reasonable to be placed above the nearest Bill Williams fractal resistance at 1.08686. Conservative traders can partially fix profits above the first Fibonacci level of 161.8%. The SL is recommended to be moved after parabolic values every 4 hours after the GTC is done. Thus, we optimize the return/risk ratio in our favor down the process of market changes. It is recommended to cancel the pending sell order if the price crosses the stop loss level before it reaches the pending order level.

Directiondown
Position openingbelow1.08126
Preliminary targetAbove 1.07799
SLabove 1.08686

Market Analysis provided by IFCMarkets


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