AUD/CAD
Good morning one and all and welcome to the Chart of the Day. Today's choice is AUD/CAD. Well, what a difference a day makes, or to be more precise, a weekend. The North Korean meeting is back on. And South Korea's leader may be joining the party next. I am openly cynical about the intentions of NK to have any meaningful dialogue with peace, but I have to say that the only reason that this meeting is still on is due to the open letter Trump wrote to NK. It was very warm and that warmth has thawed a little of the usual NK frostiness. For our purposes, that has added some 'risk on' tone back into the market with NZD and AUD both being bid.
Conversely, oil is tanking. The news that OPEC is going to allow more production is important. Very important. This is a shift in sentiment and Oil is going to be offered, which in turn will weigh on CAD.
So, we have our trade. AUD/CAD long. You can try and enter at market, use your own technical system, or follow the guide below. Enter on a. pullback on the 1 hour chart and target a 100% extension of the leg move on the 1 hour. See buy zone marked on chart and put your stop underneath the 1 hour swing. When in the trade, trail your stop behind price swing points.
Risks to the trade: Any retraction of the NK meeting with Trump or news out of OPEC that production won't be increased.
