Market Watchdog Jun 04, 2015
Here is a Forex market update at the time 5.45pm (Paris time).
The interesting news for Friday is:
|All Day||ALL||OPEC Meetings|
|CAD||Labor Productivity q/q||0.2%||-0.1%|
|USD||Non-Farm Employment Change||226K||223K|
By the time we are writing this article, a Bearish engulfing pattern has appeared on the USDCAD pair. This is the premise of a bearish trend that may be due to the CAD Employment Change news tomorrow:
Before initiating a short trade, better wait for a second bearish signal, for as we can see buyers are still strong. The OPEC meeting tomorrow might also reinforce the US dollar so one must be caution with this trade. Moreover, Fridays are very volatile, one more reason to pay attention on your transactions.
For those very aggressive, you can enter a short trade right now with a stop loss at the Engulfing pattern, namely at the price of 1, 24971. Your objective will be the first candle resistance at 1, 24475.
For those who are more conservative, you can use the Ichimoku indicator and wait for a bearish cross of the Chinkou MA. On a 30mins time frame, if Chinkou crosses the prices upwards at the 1, 2447 level, it will be possible to enter a short trade with an objective of 1,2 4100. For the more aggressive who would have initiated the trade right now, just stay in the market to reach this second objective.
Conclusion: focus on USDCAD prenews, pay attention to the OPEC meeting and its impact on the USD, and close every trade you may have initiated before the NFP release. Next update in the following hours…
Markets started slowing down; this is time for a little update. Let’s have a look on potential opportunities…
1 hour time frame. The cluster of candles we have after this strong bearish trend is called a “fry pan bottom” (Nison). Prices I likely to surge in a couple of hours, but we must remain cautious. If prices get above the last white candle, we may be able to initiate a long call trade. The objective will be the Tenkan Sen MA of Ichimoku at the 62, 85 level. We will keep in mind that Friday is the OPEC meeting, including many potential perturbations.
Due to Greek government’s reaction in the end of the afternoon, USDCAD rose today. This doesn’t invalidate our prenews (short put), but we’ll have to wait or a new validation signal. By the time we are writing this article, there is no real strong candle or viable pattern that would allow us to re-enter the market.
We are trying to validate a short position using the Stochastic on 2 time frames.
As we can see, in a 1h time frame, the Chinkou MA crossed the price downwards and the stochastic is bearish:
In a 4h time frame, we can see that the Stochastic is bearish as well. This is a confirmation that prices may continue to drop a few Pips (10 to 15):
If you initiate this trade, be cautious to close it at any reversal alert (candle or momentum indicator).