Transcript of Video
From Forex Traders Daily, this is your daily analysis with Ross Mullins, live from Richmond, Virginia.
Hello everyone, this is today’s video analysis for April 24, 2018. Today we’re taking a look at the US Dollar versus the Canadian Dollar [USDCAD] for today’s trade analysis.
Starting here on the daily timeframe, a couple of trends we’re taking a look at. The previous uptrend, the green trend line, as the market was rising from the lows down here into the 1.2200s, all the way to the highs in towards the 1.3100-level at the top of the chart. Since then, we’ve been falling along the blue trend line. Falling from the 1.3100-level back down into the 1.2550 or so level, the orange-shaded area at the bottom of the blue trend line.
And now the past week we’ve seen a shift once again of that trend as the market has pushed from the 1.2550-level all the way up to the 1.2825, 1.2830-level as we settled down on top of this orange-shaded area and support. So, very interesting trending movements here for this currency pair. Rising, falling, and now rising once again.
What I want to point out to you today is the area between the orange zone into the 1.2800-level and the blue zone, 1.2900-level. The area between there. We’ve seen the market bouncing around in there before. I’ve highlighted it with these black boxes, where we’ve seen support at the orange zone, resistance at the blue zone. Each one of these black boxes represents that period where we’ve seen orange zone as support, blue zone as resistance.
I’ve also highlighted, back here, where the blue circle is, a period where the market was under the orange zone, found resistance, and went back down. So, what all of this tells us – the black boxes, the blue circle – is if the market stays under the orange zone, it’s resistance. If it gets above the orange zone, there’s a high probability statistically speaking of some support into that orange zone.
Well, as we see today, the market has now pushed through 1.2805, 1.2825, the orange zone, and it’s now sitting on top of it as support. Interesting enough, 1.2826. If you take Fibonacci from the top of the blue trend line, down to our most recent lowest low – top of the blue trend line, down to the lowest low – with Fibonacci retracement tool, that puts a 50 percent retracement. Now, 50 percent of course not a Fibonacci level, but it’s a commonly understood retracement point.
Halfway point of the previous trend. 1.2826. And we’re sitting on top of that, which is the top of the orange-shaded area as well. So, we know historically this is an area of support and resistance. We know there’s a 50 percent retracement level there. So, as long as the current momentum holds, we look for a breakout scenario, which is a break above the orange zone and a continuation towards the blue zone.
So, that’s what we’re looking for today. A hold of support at the orange zone. Continuation to the blue zone, which happens to be, by the way, the .618 Fibonacci retracement level of that same blue trend range. So, that sits at 1.2896, bottom of the blue zone. And the risk in this scenario is the market turns around and goes down. Gets back under the orange-shaded area. Goes back down to the green-shaded area.
So, as long as it’s on top of the orange zone, I’m looking for a long in the direction of our current momentum, targeting the blue zone. Risk is it gets back underneath the orange zone. Back to the four-hour timeframe. It doesn’t really change it, but take a look at this. We’ve now seen the market clearly breakout, open and close. Stay above several candles above the orange-shaded area, increasing our confidence. Not a guarantee, but increasing our confidence in a real break rather than a false break. And now, again, we’re looking for it to hold above here.
We don’t want it to get back underneath here. We look to target the next level, which is the blue zone. Again, look at the left-hand side. We could see support: orange zone. Resistance: blue zone. And of course our risk is that it breaks back under the orange zone. Stop losses of course for any buys that you take are sitting just underneath this orange-shaded area. That way, if the market decides to make a different decision and go down, we limit the impact to our trading account.
So, buying the USDCAD on top of the orange zone, 1.2805, 1.2825, is the trade for the USDCAD today.
Forex Traders Daily, this has been your daily analysis with Ross. If you would like to get Ross’ analysis on all the currency pairs he’s watching and all the trades he takes today, join him in his live Trade Room by clicking on the link below. Please leave any comments you have about today’s video in the comment section below.