Trading plan for January 31

According to the economic calendar, the most important event for today is the release of the monthly GDP for Canada. Analysts anticipate the decline by 0.1%. If the actual level is higher, the CAD will get stronger.

As for the news, the second day of trade talks between the US and China will continue today. US President Trump and Chinese Vice Premier Liu will meet today at 21:30 MT time. Any positive news concerning trade policy between the two countries will boost the risk-weighted currencies.

Let’s look at the daily chart of USD/CAD.

As we can see, the pair has been declining after yesterday’s dovish comments by the Fed. We can definitely see the completely formed head and shoulders pattern with the necklace at 1.3158. This chart pattern means that the further declines are likely to happen. According to parabolic SAR, the trend for the pair is bearish. 

Now let’s turn to the H4 chart. Yesterday bears managed to pull the price below the 1.3158 level.  We can see, that the CAD has been strengthening since the beginning of the trading day, as the pair continues to fall. Greater-than-expected figures for the GDP growth will pull USD/CAD lower to the support at 1.3104. Otherwise, it will return to the resistance at 1.3168. RSI has entered the oversold zone. If it leaves it, this may be a good signal to open a long position.

Now let’s look at AUD/USD chart.

The pair has been rising amid the weak USD. However, according to the parabolic SAR, the trend is still bearish. If we look at the H4, the pair has been rising since the beginning of the day, targeting the resistance at 0.7281. Positive updates on the trade truce and the weak USD will help it to break this level and move towards the next resistance at 0.7328. Otherwise, any uncertainty will pull the pair down towards the support at 0.7256. The next support lies at 0.7218. RSI entered the overbought zone. If it leaves this zone, it will be a signal to sell the pair.

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