USDCAD makes for a very good trend trade right now and I have been scaling in and out of this position ever since. After reaching highs of 1.46, prices failed to sustain that level and has been selling off every since.
March’s Non-Farm Payroll figure only provided a temporary boost to the U.S. Dollar as traders price in the strength and forecast the next incremental rate hike to be on par with expectations.
Switching over to the 4-Hour chart, we see selloff and the temporary boost the Non-Farm Payroll figures have provided. Just a recap, 242K jobs were added in February and the unemployment rate remains at the 4.9% lows.
Switching over to my 1-Hour time frame, I present currently another selling opportunity. You can, of course, hold your short positions all the way through, but I prefer to scale in and exit multiple times to just capture the next leg of the move in order to compensate for capital restrictions and the increasingly chaotic trading sessions in the Forex landscape.
Speaking of volatility, here’s another reason why USDCAD provides a very good short opportunity.
Looking at this figure, the beginning of 2016 marks of extremely high volatility even though we expected it to fall shown by the decline through 2015. Given the extreme long positions held by traders, I do not see much upside can be expected from this pair.