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 November 10, 2017. Today we’re going to be taking a look at the US Dollar versus the Canadian Dollar [USDCAD] for today’s trade analysis.
Now, it’s important for me to recognize the fact that today is a bank holiday in the US, so we may see limited market movement as we go into the weekend here on this Friday, but definitely we’ll watch for some opportunities as we go throughout the day. We do have some US data at 10AM Eastern US time, but again, not expecting a whole lot of movement today because of the bank holiday.
Starting here on the USDCAD daily timeframe, there’s several things converging together that we want to make note of because when several indicators converge together, it makes somewhat of a brick wall in the market, and so we want to find them and potentially look for an opportunity to trade the USDCAD.
First off is the trend line. The blue trend line coming up from the bottom. We could see that overall, for the past several weeks, going back to the beginning of September, we have been in an uptrend along the blue trend line. Sure, over the past week and a half or so we’ve seen a bearish move for the USDCAD, but the overall picture has been overwhelmingly bullish since early September. Not only that, and I’m going to begin to zoom it in here a little bit.
Not only that. We see the 100-period simple moving average. That’s the green line coming into the chart. The 100-period simple moving average sits just at the bottom of that pink-shaded area, 1.2600. So, we have the trend line just above the pink zone. The moving average just under the pink zone. The pink zone. Follow it back in time to where the blue circle is and you see resistance there. So, resistance often helps us identify future support. That’s why the pink-shaded area is there between 1.2600 and 1.2635.
We also, well, while we’re mentioning that, have 1.2600. That 1.2600. The double-zero level offering a psychological boundary for the market. And lastly, we have Fibonacci looking from the bottom of the chart. The lowest low to our current highest high. The recent high that we’ve made. Fibonacci low to high puts the .382 Fibonacci retracement level at 1.2590, just at the bottom of our pink-shaded area.
So, we have the trend line. The moving average. Historical resistance acting as support. Fibonacci. All of this lining up right here at the pink-shaded area and of course the 1.2600-level. So, it’s likely that we’ll find some support here into the pink-shaded area. So, if we’re potentially going to find some support here, it gives us an opportunity to look for a trade scenario into that pink-shaded area. We’re looking for support. We’re looking for reversal to go back up in the direction of the trend.
And the other part about this scenario is it tells us what our risk is. The risk is that it breaks through that barrier. So, you think of that pink zone, where all these indicators are converging together, somewhat like a brick wall. If it breaks through the brick wall, we expect it to accelerate lower. If it doesn’t break through the brick wall, it bounces off of it and goes back up. So, as it dips its toes down into the water, as it dips down into the pink-shaded area, moving average, trend line, Fibonacci, support-resistance, we could look for price action that indicates reversal. An infusion of buy orders.
That could look like a couple of things. It could look like a hammer candlestick with a smaller body, long wick on the bottom, showing an infusion of buy orders. It could look like a bullish engulfing candle, where we see a bearish candle and then a fuller bullish candle after that. All of those things are indicators, price action indicators, we can look for here into this pink-shaded area and the only risk we have is that it breaks down through that pink zone.
Now, if it does break down through it, of course we have other areas of support down here. The green-shaded area. You could see some congestion around that, even all the way down here to the orange-shaded area, where we see 1.2400. And by the way, .618 fib sits down there as well. And you could see support here. Quite a bit of support there. You could see the congestion here, looking back in this area right in the middle of the trend. So, significant area here.
Four-hour timeframe not really going to change the perspective here, but it will show us that we have at least recently pushed underneath the yellow zone. Unfortunately, pushing underneath the yellow zone. We were looking for support here as well, but I think everything is lining up pretty well here into the pink-shaded area for a potential support. It may not be today. It could likely be going into early next week. Potential support and the potential for this to turn back higher in the direction of the trend for the USDCAD over the next several days.
From 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.