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 March 12, 2018. I hope you had a great weekend and are ready to get started trading this week. In today’s video, we’re going to take a look at the US Dollar versus the Canadian Dollar [USDCAD] for today’s trade analysis.
Starting on the daily timeframe, we really have three trends that we can see here on this current page. You can see the rising trend, the blue trend line, where it rose all the way up here into the 1.2900-level. Several times finding resistance into that blue-shaded area. Resistance. Reversal. Resistance. Reversal. Resistance. And then of course significant reversal along the black trend line, pushing all the way back down into the 1.2200s again.
Then recently we’ve seen an uptrend along the green trend line when the market has been rising from the 1.2200s, pressuring all the way up here towards the 1.3000-level at the very top of the chart. Now, over the past few days, about a week or so, we’ve seen a pullback here on the USDCAD as it’s pressured back down a little bit. Still within the parameters of the uptrend. As you define a trend, define an uptrend or a downtrend, you’re looking for specific price characteristics within that trend that can help you identify it.
So, in this case, along that green trend line, we see rising lows. Well, the first couple of lows at least where we see the market fall back a little bit within the trend, down here, where the black X is, and find support right around the 1.2465, 1.2490-level. Started moving back up. Here’s another little period within the trend where it pulled back. Not quite as significant, but pulled back here in the middle of the green trend line into the 1.2615, 1.2630 or so level, the orange-shaded area. By the way, on top of the 100-period moving average, and found support and started moving back up.
So, this period now, where we’ve seen it pull back into 1.2800 again, is not extraordinary. Not different within the pattern of the trend. It’s still within that pattern of the trend, where we see the pullback finding support now. So, the question is: today, are we going to find support, turn around and go back up in the direction of the green trend line as it did the last two pullbacks that we see in the middle of the trend or lower part of the trend, or is it going to break this trend and go lower?
So, that’s the question around the orange-shaded area. 1.2805, 1.2825 is that orange zone. If you look again back to the left, you see the black boxes, the black circle. Shows support at the orange zone. Resistance at the orange zone. So, we know that the orange-shaded area that we just listed out is a significant decision zone. Fibonacci, by the way, from the low, and actually I need to pull it right down to this low here. From the lowest low on the chart, well, of the green trend line and the black trend line. The lowest low to our current resistance high puts the .236 right around the 1.2823-level. That’s the top of our orange-shaded area.
Let’s go ahead and take this down to the four-hour timeframe. And so, as we could see, last week we did get the push below the blue zone. Now down to the orange zone. We’ve seen historical support here before. Just look back here, where this small black circle is. Support and the next rally. So, we know that there’s historical evidence and fact around this orange zone of historical support and it becomes a significant decision point for the market.
One of two things is going to happen here. It’s either going to bounce off of it, the green trend line, the .236 fib, the orange-shaded area, and go back up in the direction of the longer-term trend. Again, we know that those last couple of times pressuring towards the trend line did that, or we see a change of status quo. We see a change of market behavior and it breaks through 1.2805 and starts working its way lower again.
So, those are the two things we’re looking for here early this week. Indications of rising or falling. Again, if we’re going to trade the longer-term trend, more likely looking for a buy scenario into the orange zone. If you’re looking for just a short-term trend or direction that the market has been going in, you may be looking for a short, but of course sitting on top of the orange zone, 1.2800, doesn’t make sense to go short yet, unless it’s able to break that barrier.
Zoom in one more time. So, what I’m looking for today is indications it’s going to stay above 1.2825. I’d love to see a candle body close or get above this orange-shaded area, giving me a higher confidence at least that the market is going to continue to pressure higher. And let’s make this look more like a blue candle or an implied blue candle here. So, I’d love to see it get above the orange zone. Stay above the orange zone to imply that the market will get turned back higher towards the blue-shaded area or maybe even turn longer in the direction of the trend.
The risk here is that the market changes and gets under the orange-shaded area. Let’s draw this out as a red candle just to be consistent here. So, if it gets above, we look for it to go higher. If it gets below, we look for market behavior to change, below the trend line especially, and we’d look for it to go down to the green zone or if not lower. If the complete trend changes, we could be looking for it to go lower. .382 by the way down here towards the yellow-shaded area.
So, above the orange zone, goes higher. Below it, goes lower. That’s what we’re going to be watching for today for the USDCAD.
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.