During Friday’s early European trading session, the USD/CAD currency pair succeeded in breaking its previous day consolidation phase and hit the 1-1/2-week high just above mid-1.3600 level, mainly due to the broad-based U.S. dollar strength backed by the downbeat trading sentiment.
On the other hand, the reason for the currency pair gains could also be attributed to the weaker oil prices, which eventually undermined the demand for the commodity-linked currency the loonie and contributed to the currency pair gains. At the moment, the USD/CAD currency pair is currently trading at 1.3614 and consolidating in the range between 1.3574 – 1.3632.
Investors seemed cautious about the increasing number of new coronavirus cases globally and the probability of renewed lockdowns restrictions to control the spread, which eventually overshadowed the prospects for a sharp V-shaped global economic recovery. As per the latest report, the U.S. cases crossed a total of 3.0 million marks and reported over 60,000 cases Over 12.2 million cases and 550,000 deaths globally were reported as of July 10, as per John Hopkins University data. Most of the states like Florida, Texas, and California, reported a record-high number of new cases on Thursday.
However, the gloomy outlook was further bolstered by the ongoing tussle between the United States and China. The conflict between both parties was further fueled after Trump administration member Mike Pompeo announced visa restrictions on the People’s Republic of China (PRC) government and Chinese Communist Party officials over creating hardships for foreigners to visit Tibet. As well as, the United States imposed another sanction on the highest-ranking Chinese official over alleged human rights abuses against the Uighur Muslim minority which exerted some downside pressure on the risk-tone and contributed to the currency pair declines.
The USD/CAD pair is examining a double top resistance mark of 1.3635, and that is where we can anticipate a sell-off in the USD/CAD currency pair. On the 4 hour chart, the closing of a selling candle, known as engulfing candle, suggests chances of selling unto 1.3580 level. Here’s a quick trade plan.
Entry Price – Sell 1.36003
Stop Loss – 1.36403
Take Profit – 1.35603
Profit & Loss Per Standard Lot = -$400/ +$400
Profit & Loss Per Micro Lot = -$400/ +$400
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