Good afternoon, dear traders. Today at 14:30 (CET, server time) two key macroeconomic indicators of the Canadian and American economies are to be released:Manufacturing sales in Canada and the U.S. Producer Price Index,PPI m/m. Both indicators are determined on the monthly data basis, and characterize the manufacturing sector development. It is worth mentioning that the change in sales volume in the Canadian manufacturing sector is a leading factor in employment and consumer spending, which considerably affects the investment volume in the economy.
U.S. Producer Price Index is rather considered to be an inflation index, because it indicates the percentage change in price of the U.S. goods and services. PPI m/m includes three production areas: industry, commodity sector and processing industry. The significant index growth improves inflation expectations and reduces purchasing power.
There is a high probability that the release of both indicators may cause USD/CAD increased volatility.
Here we consider the USD/CAD behavior on the daily chart. The price approached to the daily downtrend line, a large-scale movement also has a bearish trend. However, we can see that RSI-Bars leading oscillator demonstrates the first weakening trend signal: the resistance breach, marked in red ellipse on the chart. We assume the breach to be false, only if the price continues moving within the D1 channel and crosses the support at 1.06164. You should wait for this signal if you are planning to open a short position. The key level of 1.06164 is confirmed by Parabolic SAR historical values and the DonchianChannel lower border.
A definite conclusion on the daily downtrend completion can be done only after the fractal resistance downward breach at 1.08930, which coincides with the trend indicators historical values. This is exactly the key level to place a pending buy order. Risk limitation is placed at the last support level of 1.06164. In case the movement continues within the D1 channel, you can start selling from the same key position at 1.06164. When crossing this level, the Parabolic downward reversal and the Donchian channel support downward intersection are expected. Thus, the pending sell order is determined in a symmetric manner.
After two pending orders opening, we expect the first of them to be executed and the opposite position to be closed: let the market chaos decide the behavior. After position opening, Trailing Stop is to be moved after the ParabolicSAR values. Thus, we are changing the probable profit/loss ratio to the breakeven point.
16 июля 2014 г. @ 11:24