By IFCMarkets
NonFarm release – trader’s day
Today a few fundamental indicators of the Canadian economy are released at 14:30 CET: Building Permits, Employment Change and Unemployment Rate. The first indicator is published monthly and indicates the number of permits for new construction, issued by the government. The indicator allows estimating the growth potential of real estate sector and, as a consequence, we can assess the increase in consumption of secondary demand and technology goods. Taking the labor market data into account, this indicator determines the consumer demand in Canada. At the same time, all currency traders are looking forward to the labor market data released in the United States: Non-Farm Employment Change, which is published every month by the US Labor Department. The indicator change has a strong impact on consumer spending and investment appeal of the United States. It is also important to note that the indicator is published among the first ones and has a long-term impact on the market (up to one week). Thus, we assume that a new volatility momentum for USD/CAD currency pair is possible to surge at 14:30.
Here we consider USD/CAD on the H4 chart. The price reached the daily resistance line, made a reversal and formed a pullback. The preliminary trend line is made on the basis of ParabolicSAR historical values. RSI-Bars oscillator confirms the bearish signal: the final confirmation would be received after the breakout at 55.1948%. It will be likely to happen ahead of the price intersection of the fractal level at 1.17933. This mark can be used for placing a pending sell order. There are high chances to observe a short-term retracement because traders take profits before the Nonfarm release. As seen on the chart, the current candlestick is preceded by the “absorption” pattern, which includes doji: bears are still winning. Stop Loss can be placed at 1.18733. This mark is confirmed by Parabolic historical values, the Bill Williams fractal and the upper Donchian Channel boundary. After order execution, Stop Loss is to be moved near the next fractal high. Thus, we are changing the probable profit/loss ratio to the breakeven point.
However, the possibility of the CAD long-term retracement is not yet confirmed by the trading volume. According to the figure, the volume of CAD futures traded on the Chicago Mercantile Exchange is going up, but hasn’t still outperformed the high of 80000 contracts. To monitor the volumes click here.
| Position | Sell |
| Sell stop | below 1.17933 |
| Stop loss | above 1.18733 |
Dear traders. For the detailed report of the strategy based on analytical issues of technical analysis click here.
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