Apr 19 2021 0
USD continued to lose its attractiveness last week as FED maintained its policy stance despite strong economic data. At the beginning of the week, there were no noticeable gaps.
- USD has a second consecutive week of decline due to falling US bond yields making other currencies relatively more attractive.
- Many reports show that big boys like hedge funds have closed short positions on US bonds this week. They believe that the Fed will not rush to tighten monetary policy due to the prospect of a skyrocketing inflation rate in the next few years.
- China's first quarterly gross domestic product data shows that China's economy grew slightly worse than expected. Quarterly growth slowed to 0.6%, from 2.6% in the previous quarter.
- Great Britain is in the aftermath of Brexit. New trade data on Friday showed European Union imports from Britain nearly halving in the first two months of the year after Britain exited the market. The 27-nation's trade surplus with the UK has also increased due to less drop in the bloc's exports.
The price is still accumulating right below the 109 zone but there is no strong downward move as expected. However, no negative signals have appeared, except for the small doji bar on the daily chart, so we will continue to maintain a sell strategy to the 108 price range. Consider moving the Stop Loss for old sell orders. to reduce the risk. The 108 zone is an important price zone, as it is the final stop for mid-term uptrend buyers. 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 is not large enough to push prices away from round number 1.20. This price action is increasing the likelihood of the price breakout and continuing to go up. However, there is still a need to be wary of the possibility of price creating a short-term rounding top pattern. To be safe, you should wait for a buying opportunity when the price retraces to the 1.19 zone with a bullish signal, or when the price completely breaks the 1.20 zone.
From the resistance zone of 1.380-85, prices fell in the first half of the week's session, but rebounded sharply in the second half of the session, re-testing this resistance area. The price is still in a bearish structure at the moment so you can keep sell orders. Place Stop Loss above the area of 1.39. In addition, we do not exclude the possibility that the price creates a double bottom pattern around the 1.367 level.
USDCAD continues its range from the end of March until now, and it is again retesting the range bottom. The possibility of a breakout is increasing as the price continues to push to this support at 1.25. However, trading should only be considered when there is a clear breakout signal. The target will then be the zone 1.235.
Prices did slightly decrease in the last session of the week, but overall it has not had a significant impact on our current buying strategy. Please continue to hold orders. In case the price retraces to the 0.767 conversion zone, if a bullish signal appears, it is an opportunity for new long positions to be added.