Morning Brief, Nov 23 – Top Forex Trade Setups, Canadian CPI Shares the Stage

Posted Friday, November 23, 2018 by
Arslan Butt • 2 min read
  • The Greenback went broadly higher as investor sentiment once again turned to the downside, with stock markets and key commodities including oil bears slumping as traders withdrew across the board.
  • The market awaits a series of manufacturing and non-manufacturing events from the Eurozone.
  • How to trade the Canadian dollar on inflation rate?

EUR/USD – Triangle Pattern & Bullish Crossover

On Friday, the European Union negotiators gather in order to clear the last obstacle before a Sunday summit which is due to support the Brexit deal, but Spain’s last minute objections over Gibraltar signifies that the final text would not be ready until the last minute.

Overall, the single currency remains supported as the US markets remained closed on Thanksgiving and the technical indicators also supported the bullish bias.

Technically, the EUR/USD consolidates above $1.1415 after placing a low below $1.1403. It’s formed a doji pattern above a strong support level of $1.1350. We can expect EUR/USD to continue trading higher until $1.1535, while the support remains at $1.1310.

Potential Economic Events to Impact

The European economy is due to release a series of economic events, which include:

  • French Flash Manufacturing PMI – The figure is due at 8:15 (GMT) with a forecast of 51.3 vs. 51.2 during the previous month.
  • French Flash Services PMI – Besides the French Manufacturing PMI, the services PMI will also be observed. It’s expected to drop slightly to 54.9 vs. 55.3.
  • German Flash Manufacturing PMI – The data will be released 15 minutes after French services and manufacturing PMI at 8:30 (GMT). It’s forecast to rise from 52.3 to 52.2.
  • German Flash Services PMI – It’s scheduled with a forecast of 54.6, slightly below the previous month’s figure of 54.7.

Daily Technical Levels

Support    Resistance
1.1326       1.144
1.1285       1.1513
1.1171        1.1628
Key Trading Level: 1.1399

EUR/USD – Trade Plan

The idea is to stay bullish above $1.1380 with a stop loss below $1.1340 and take profit at $1.1460 and $1.1535. While selling is preferred below $1.1310.


USD/CAD – Trading the Inflation Rate

The Loonie remains under the spotlight due to the upcoming inflation figures.

CPI m/m – Lately, Canadian inflation has been suffering despite the improved crude oil prices. In the month of September, the CPI figure came out at -0.1%, beating down August’s gains of 0.5%. Economists are expecting a 0.1% rise in the inflation rate this month, but the thing is crude oil prices are even worse now and the market sentiment remains negative regarding inflation rate.

However, it will be awesome to trade any figure above 0.1% as this can drive USD/CAD 50/60 pips down in few seconds.

Core Retail Sales m/m – The figure shows a change in the total value of sales at the retail level, excluding automobiles. A higher number of retail sales signals a growth in the economy.

Statistics Canada is due to release the figure at 12:30 (GMT). Canadian retail sales surprised the market with a 0.3% jump in November. Let’s see how it performs this month to determine further trends in the Loonie.

The USD/CAD plunged to $1.3190 to trade in the oversold zone. For now, the bullish trendline is extending a strong support to USD/CAD at $1,3180. In fact, the pair is trading in a bullish channel on the 3- hour chart. On the violation of $1.3180, loonie can go after $1.3160.

Daily Technical Levels
Support    Resistance
1.3203      1.3366
1.3098     1.3423
1.2935     1.3586
Key Trading Level: 1.3261

USD/CAD – Trade Plan

I’m looking to open a buy position above $1.3180 with a stop loss below $1.3160 and take profit of $1.3260.

Stay tuned to FX Leaders for more updates!

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