Apr 20 2021 0
Despite the lack of important economic data at the start of this week, we can still see noticeable movements in the market. The USD has just hit a new 1-month low after a period of sharp decline. This has had a strong impact on other currencies.
- USD continued to slide down in the first session of the week. Analysts at ING believe that the USD may have peaked in this correction.
- Global equities traded near record highs on Monday, as markets were generally optimistic about the prospects for a post-pandemic global economic recovery, before a busy week with earnings reports.
- The US has enacted a series of new sanctions against Russia.
- The number of visitors to stores across the UK increased 87.8% in the week to April 17 from the week before non-essential stores in the UK were allowed to reopen after three months of blockade.
- The European Central Bank said on Monday that the size of risky assets held by major banks in the bloc had reached €275 billion.
After days of holding sell orders, the price has finally approached the target, the 108 area. Consider the risk reduction measure: exit part or all of the order and move the SL with the rest of the order. Considering the recent bearish action, we see that the selling force is very strong while the buying force around round number 108 is too weak. This may hint at a possible further downside. However, as has been said many times about the importance of the level 108, we should only continue to sell in case it breaks completely. We do not rule out the possibility of false-break in this area.
The second scenario happened. The price breaks out at 1.20 and triggers new buy orders. For these long orders, the target will be the zone 1.21. However, the market is gradually falling into overbought state. Combined with the strong confluence above, it has potential for strong and unexpected corrections. Therefore, we need to set tight SL for buy orders this time.
The price had a quite strong breakthrough in the first session of the week, penetrating the 1.385 zone and the 1.390 zone. This price action forced us to abandon the previous sell strategy as the short-term bearish channel has broken and the double bottom pattern is complete. On the daily chart, we can also see that the long term uptrend correction is over. Price is returning to an uptrend. Consider buy orders. However, it is not excluded that there will be selling pressure around the 1.40 zone, so we should wait for the price to retreat for a better price or until this zone is completely broken.
Price movement on USDCAD remains annoying. After the breakout is a strong correction. It shows that the sellers are not completely overwhelmed in this situation. Sell orders are potentially risky. You should consider carefully.
The price did not retreat further to the 0.767 zone, so new buy orders cannot be added. The uptrend continues and the price is moving closer to the 0.78 zone. We will continue to move SL for buy orders. Long-term uptrend traders should hold their positions. For short-term traders, pay attention to the possibility of price correction around the 0.780 - 0.785 zone and consider exiting orders at this price range.