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 January 10, 2018. Today we’re going to be taking a look at the US Dollar versus the Canadian Dollar [USDCAD] for today’s trade analysis.
Starting here on the daily timeframe, we want to study the historical areas of support around the orange-shaded area down here at the very bottom of the chart. We’re looking at 1.2405 up to 1.2440 as our support zone. Again, that’s the orange-shaded area at the very bottom of the chart.
Of course historically we were in a downtrend, but we’ve seen some upward movement here for the USDCAD over the past several weeks. We have seen a little bit of a pullback though into the .618 Fibonacci retracement level of the recent rise. What I’m talking about is taking Fibonacci from the low on the chart to the last resistance high that we see here. Measuring that range highlighted by the black line here with Fibonacci puts the .618 Fibonacci retracement level at 1.2389, just a hair underneath that orange-shaded area.
Zoom it in a little bit. You see the two black circles to the left-hand side. You see support here, far left-hand side. You see support here on the middle of the chart. And once again, here we are finding support over the past three days into that 1.2405-level, the bottom of the orange zone. Again, the .618 fib sitting just underneath it.
So, what we’re looking for here around this orange zone is evidence of direction. Right now obviously the market has been in a free fall, but has found support at 1.2405. So, what we’re going to need to see if this is going to go back down and continue the downtrend: it will need to break through this barrier, 1.2405. If it cannot break through that barrier, we may see a rebound for the USDCAD.
A rebound from the orange-shaded area would look like some sort of reversal. We’d look for higher lows, higher highs, which we don’t really have quite yet. To give us a clue to reversal, we’d look for a momentum shift. We really watch all the other US currency pairs for a USD surge or a positive movement for the USD, which we have seen a little bit, but pulling back somewhat today from that surge that we’ve seen in favor of the USD.
But here we are, right around the orange-shaded area. Let’s zoom it in one more time. So, we have seen the last three days rising a little bit. We see a low here. A low here. A low here. So, that may give us some confidence that the market might be trying to see a surge back higher again. What I’d like to see is it break through the high of the three days ago. This resistance candle here or this red candle here. I would like to see it get through that high if we’re going to see it go higher. If it can’t, then it’s possible that we look for a surge right back down underneath this orange-shaded area.
If I’m looking to sell it though, I want evidence of that. I want to see it get back underneath the orange zone before I’m looking to go short. So, I don’t want to go short on top of the orange zone. There’s nothing really to tell me to go long quite yet here on this currency pair, but if you’re going to, your risk-reward is better here as close as possible into the low-1.2400s, targeting back to the green-shaded area if you decide to go long against the trend.
I would prefer to trade the direction, the momentum, and the market has been going in for the past couple of days. So, my preference doesn’t always mean that’s what I’m going to do, but my preference is waiting for the market to break this barrier, the orange-shaded area. You get back underneath 1.2405 and look for the continuation of the downtrend for the USDCAD.
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.