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 September 12, 2017. Today we’re going to be taking a look at the US Dollar versus the Canadian Dollar [USDCAD] for today’s trade analysis.
First thing I’m starting on is the weekly timeframe. This is all the way out on the weekly timeframe. I want to show you the history of the price level that we’re at. There’s a red horizontal line down here closer to the bottom of the chart, right around the 1.2125-level. We scoot all the way back to the left-hand side, where the blue box is, and you can see that underneath that red line there’s pretty much a free space all the way back here in 2015, down to the green-shaded are, bottom of the blue box.
So, top of the blue box, down to the bottom of the blue box, and it’s been quite a long time since we’ve been into this price level. So, definitely something that we want to take into consideration is what happened the last time we were in this price zone back here in 2015.
Back down to the daily timeframe. Now we could see the market is attempting to break that 1.2125, 1.2160-level, the blue-shaded area, and the red line at the very bottom of the chart. Clearly the trend is down and that’s something that we want to take into consideration as well. Let’s go ahead and zoom it in a couple of times here on the daily. You could see a couple of days struggling underneath this blue-shaded area.
In fact, last week we took a short on Friday underneath the blue zone. Had some profit. The market came up. Took us out yesterday and now I think it’s a good time to consider getting back in here for the USDCAD. The trend is still down. That hasn’t changed. And really if you look back up here, and this is not a circle right now, but if I make it a circle, you could see a similar situation where the market came up underneath the orange-shaded area, hesitated for a couple of days, and then suddenly fell off.
Of course there was interest rate change in Canada, causing it to go down, which again is a good reason to sell rather than buy, is the significant fall-off we had in interest rate after the interest rate change in Canada. We also had good jobs numbers on Friday out of Canada. All of that pointing fundamentally to continue to go short here on the USDCAD. It really will depend on what the USD does, whether strengthening or weakening over the next couple of days also, but I think definitely the CAD. We want to focus in on those shorts just like it would’ve been here inside the blue circle.
As you could see, just sitting around that blue-shaded area. Four days now just hovering around the underneath side of that blue zone. Recently we also see that the Forex Black Book trend bar has turned red as well, so that gives us a little bit of a confidence to continue to focus on the momentum short here for the USDCAD.
Let’s go ahead and take it on down to the four-hour timeframe. And of course when we get down here to the four-hour timeframe, it gives us a little bit of a zoomed in view to all of this. You could see the market right here, where the blue circle is settling out underneath that orange zone for a couple of days, and you could see just hovering around underneath it and finally the interest rate change and the fall-off. Once again, here very similar situation under the blue zone, 1.2125, 1.2160, where it’s just hovering underneath that blue zone.
Our risk here of course is pretty simple. We want it to stay under the blue zone or lower. And if it gets above the blue zone, we don’t want to stay in it because it’s likely looking for some reversal. Just think about the orange zone. As long as it stayed underneath it, staying short was a good idea. Only if it would’ve broken above it would we have gotten out. So, the historical pattern of the trend is fall, sideways congestion, a fall, sideways congestion. Now we’re just waiting for the sellers to come back in and drive it down to the next target, which is all the way down here towards the 1.2000-level, which is the green zone at the very bottom of the chart.
So, the pattern of the trend is there. It’s solid. We know that fundamentally the USDCAD or at least the CAD should be getting stronger based on interest rate news and jobs data that we’ve had out of Canada. I think part of the reason it’s hesitating here is what we’ve been seeing on oil. There was a significant sell-off on crude oil. Now it’s inching its way back up a little bit now. We definitely would like to see oil prices rise for this USDCAD trade for it to go back down, but definitely something we want to keep in mind are those oil prices.
Again, Forex Black Book is red, so that gives us a bearish bias. We have seen a recent sell signal here. There’s a little yellow arrow right there. That’s a recent sell signal. Of course more sell signals and reasons to get in for short would be what we’re looking for today. I’ve already taken the short, looking for it to head on back down here to the green zone. The risk and stop loss is just above the blue zone for the USDCAD today.
From Forex Traders Daily, this has been your daily analysis with Ross Mullins. 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.