USD/CAD Chartpack - Technicals & Trade Setup | August 27, 2019

USD/CAD Uptrend Edgy on Tussle Between Dragonfly, Gravestone Doji , and Bearish Engulfing Patterns:

Technical Chart and Candlestick Patterns: Both  USDCAD  minor and major uptrends test trendline supports, consequently, attempt to bounce back above DMAs and EMAs.

But, there has been a display of candlesticks such as dragonfly doji , gravestone doji and bearish engulfing patterns on daily and monthly terms.

Dragonfly doji occurred at – 1.2463 (on monthly), gravestone doji at – 1.3215 (on daily) and bearish engulfing at – 1.3123 and 1.3086 levels (on monthly).

There has been the tight tussle between bulls and bears, while both leading indicators signal overbought pressures on monthly terms.

On a broader perspective, the major uptrend spikes through uptrend line (refer monthly chart), the current price hovers around 21-EMAs as both momentum & trend indicators edgy on this timeframe but still in bulls' favour on minor trend.

Hence, the prevailing uptrend is most likely to prolong further if it holds support of the uptrend line and 21-EMAs.

Trade Tips: On hedging grounds, at spot reference: 1.3204 levels, contemplating above technical factors and BoC’s monetary policy that is scheduled for next week, we advocate initiating longs in USDCAD futures contracts of next month tenors (i.e. September’19 delivery) as further upside risks are foreseen and simultaneously, shorts in futures of November’19 delivery not disregarding the CAD’s strength amid the prevailing global geopolitical risks. Thereby, one can directionally position in their FX exposures. The directional implementation of the same trading theme by further allow for a correlation-induced discount in the options trading also if you choose strikes appropriately.