Apr 16 2021 0
The market has been accustomed to the story of strong recovery of the US economy. As a result, despite the surprisingly better-than-expected labor and retail data, the dollar was unable to bounce back.
- US retail data in March rebounded sharply, far exceeding consensus expectations (9.8% vs 5.8%).
- The number of requests for unemployment in the previous week also fell sharply compared to expectations (576k vs 703k).
- The dollar remained close to a four-week low as traders seemed to be “buying in” the idea that the Fed would keep interest rates low for a while.
- A Reuters poll showed that the Chinese economy could grow at a record 19% growth in the first quarter.
- Bank of Japan (BoJ) Governor Haruhiko Kuroda warned on Thursday that the country's economy is flourishing, but any recovery could be modest as caution remains ahead of the pandemic.
Prices are continuing to fall as expected, continuing the newly formed short-term bearish structure. However, the selling force is quite timid. We should move Stop Loss for short orders, in case of sudden reversals. The target is the 108 price zone. This area is particularly important, as it is the last stop for buyers to follow the mid-term uptrend. If it is broken, the tank structure will be violated. Hence, price action around this zone will reveal the direction of the price's upcoming movement.
Selling pressure appeared around the 1.20 price zone, but it was quite weak. This may cause many traders to expect the price to break out of this 1.20 zone, but as warned about the possibility of a correction from this area, you should consider exiting the buy order earlier. Expect the pullback to lower levels to continue buying, typically the 1.19 zone.
Price did not change much, still fluctuated just below the confluence zone from 1,380-85. Though selling has weakened, the price failed to create a lower bottom on a failure to front the support of 1.367. But overall the structure is still down, in favor of the sell proposition. With the new signals created on the daily chart, you can consider sell orders. Also, note the possibility of a double-bottom pattern if the price continues to move up.
Our patience against the temptation to sell USD/CAD paid off. In the last session, the price once again made a false breakout around 1.25, which further shows that USD/CAD is not favorable for trading at this time.
Prices have continued to go up as expected. Consider moving SL for buy orders to reduce risk. For short-term buy orders, be prepared to plan an exit when the price approaches the 0.78 zone. For medium to long-term buy orders, continue to hold.