Trade of the Day – May 22nd, 2017

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US Dollar may retrace.

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Looking for a small retracement $DXY, currently trading 96.99. Given that $DXY has made to 161.8% extension of previous swing, I am expecting a bounce from $DXY. Longer term trend remains down so retracement to 97.80 – 98.20 will provide new opportunity to short and continue to ride down trend. In meantime, to take advantage of the bounce off of 161.8% retracement I am looking at AUD/USD and USD/CAD.

AUD/USD has run into former support now acting as resistance. Entering short position around 0.7485 has a good risk to reward with stop loss at daily close above 0.7560 and profit target at 0.7371.

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Another pair to keep an eye out for is USD/CAD. Looking to establish long position in USD/CAD at 1.3455 with stop loss at daily close below 1.3395 and profit target at 1.3558.Screen Shot 2017-05-22 at 7.36.46 PM.png

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