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Transcript of Video
I’m going to get started today on the US Dollar versus the Canadian Dollar [USDCAD]. I’m starting on a little bit of a different vantage point here for this currency pair, so we could see some history of the price for the USDCAD. This is the Weekly Chart and we’re going all the way back to the left-hand side of the chart, back to 2009. We’re looking early part of 2009; was the last time we were above this horizontal, red line.
It’s a little bit difficult to see the horizontal, red line. It sits right into the mid to upper-1.1400s, but that horizontal, red line. There’s our current market price over here on the right-hand side of the chart and we could see clearly we’re not above that right now. And then you go back to the left and early part of 2009 was the last time we got above that red line.
Last time we were above here, we went back to the mid-1.1600s. That’s the yellow-shaded area that sits just above our current market price. So, it’s very interesting. The historical prices that we see here if and when we break above that red line. One more thing to note here on the Weekly Chart. Fibonacci from the highest high, down to our most recent low. Just this previous downtrend right here puts the .618 fib right up here into 1.1665, up there in the yellow zone. So, clearly something to shoot for if and when we can break above the resistance that we’re finding right here into the mid-1.1400s.
All right, let’s take that information. Let’s start to zoom in here. Just here, first off, on the Weekly Chart, and we could see there’s that red line I was mentioning here into the mid to upper-1.1400s, where the current market is holding as resistance and has for a few weeks now. We have clearly been in an uptrend, longer-term uptrend, shorter-term uptrend. We’ve clearly been in an uptrend, but it’s finding resistance right there into the mid to upper-1.1400s here for the USDCAD.
Let’s take that information down to the Daily Chart, and here we are clearly, again, an uptrend. Higher highs. Higher lows. Nothing really telling us that that pattern of the trend has changed, but we are finding, again, pretty major resistance here into the mid to upper-1.1400s. Take a look here. We go back just a few weeks ago. Here, into the beginning of November, we saw resistance. Pretty decent downfall. Another challenge here, back into November 28th. Last couple of days in November, we found resistance once again in the green-shaded area. A lot of congestion there after that and now here we are, challenging that resistance once again.
If the market breaks above here, clearly we would look for the continuation higher, but this is not the opportunity to buy this. We’re clearly holding resistance under – we’ll call the entire green-shaded area. 1.1440, up to 1.1467 is clearly finding resistance there in a very difficult place to buy it. It’s had a very difficult time breaking through there for several weeks, going back to the beginning of November. Unless or until it actually breaks through this barrier, think of that as kind of a brick wall, and so far that brick wall is repelling the buyers and keeping it from going higher. Unless it breaks through that brick wall, we’re not going to see it continue to pressure higher. So, it becomes very difficult to buy it until we break it through there.
So, no buys today. Very difficult to buy it unless, over the next few days, we see the push through 1.1465. Then we’ll look for the continuation higher. Again, that possibly takes it back to the 1.1600s, the yellow-shaded area and the .618 from the Weekly Chart. So, long way to go up if and when we see it break through there. But until then, we have to assume there’s some resistance here because there has been since the beginning of November.
So, what we’re looking for today is possible resistance and short-term reversal, which takes it down into support. Our first support would be down there, closer to 1.1400. The orange-shaded area becomes our first and closest area for support. Even deeper than that could even be down towards the blue trend line, where we’ve seen our last two lows challenging down here towards the blue trend line. So, definitely wanting to see it go down. If it’s going to go up, if it’s going to break through there, we want it to get a running head start, so we want to buy into support. The orange zone, yellow zone, purple zone, blue trend line. We want to buy into support, get a running head start, and then allow it to break through there.
Right now not a good opportunity to take into a buy. More likely, if you’re looking to enter the USDCAD today, it could be that you’re looking for sells as it holds underneath this resistance with minimal risk. Think about risk-reward for a minute. If you were buying, where’s your risk? If you’re selling, where’s your risk? Where’s your stop loss in that case? If you’re selling, your stop loss is just above the green-shaded area and the last high. If you’re buying, probably quite a bit lower. Maybe under the orange zone. Maybe even underneath the yellow-shaded area, where we see our last supports here. So, quite a bit different. The risk is very large compared to the potential profit right now on the USDCAD on the buy side and much better. Potential risk is smaller. Potential profit targets are larger for looking for resistance and reversal for the intraday on the USDCAD.
Take that information down to the 4-Hour Chart. Squeeze it back out a little bit like this, and there it is. We’re finding our resistance already today. We could see, since market opened, holding just underneath that green-shaded area. If you’re looking for an opportunity, as close as possible to 1.1440, 1.1445 gives you lower risk, higher potential reward. We’ll shoot it down here towards the 1.1400-level as our potential profit target. On the way down, a push underneath the orange-shaded area. We could see what happens then. If it gets under the orange zone, we’ll look for it to go back here to the yellow zone and so forth on down if it reverses from this green zone.
But risk-reward-wise tells us today that as long as it’s underneath there, well, all I have to do is go back a little bit to the left-hand side. Take a look back here. Let’s circle this and look at the similarities that we see going on between this timeframe right here and the current market price. Look at the resistance into 1.1440 and look what happened. I’m not saying that’s what’s going to happen today, but history tells us that as long as it stays underneath here, there’s resistance and the potential reversal. Terrible place to buy it. Better place to sell it today on the USDCAD.
