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 13, 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, there’s really two trends that we’re going to look at here. The green trend line, the rising trend, and the blue trend line, the falling trend. Currently we are in the blue trend line and the falling trend. Fibonacci of the green trend, the previous uptrend. Fibonacci from the lowest low to the highest high puts the .618 Fibonacci retracement level at 1.2583, which happens to be in the middle of the orange-shaded area right in the middle of the chart.
So, right around 1.2600 to 1.2570 is the orange zone and that .618 sits right there in the middle. So, what that tells us is now that the market has retraced to that .618 Fibonacci retracement level or 62 percent retracement, there’s one of two things that’s going to happen. It’s either going to bounce off of it and go back up in the direction of the previous trend or we’re going to see the market break through there in the direction of the current trend and continue to go lower.
Look back here, where the three circles are. The two blue circles and a black circle. You could see underneath the orange zone there’s this tendency for it to go down to the green zone. You could see that first blue circle. Orange zone down to the green zone. We could see the market holding under the orange zone here and going down to the green zone. Actually lower. You see back here, where the black circle is under the orange zone, down to the green zone as support.
So, we know that if it breaks the .618, breaks the orange zone in the direction of our current trend, there’s potential it goes all the way down here to the green zone, which is 1.2490, 1.2465. That’s what history has told us about the direction or about the market movement of this currency pair. Under the orange zone has a tendency to go to the green zone or lower. Obviously if it bounces off, we would look for it to return back to the blue trend line or higher.
100-period moving average now above the market. We could see that it broke through there a couple of days ago and continues to pressure lower, again, challenging the .618 today. So, what we’re really looking for is evidence that it’s going to break this orange-shaded area and continue to go lower, or evidence that it’s going to reverse and go back higher.
Something else we studied in the live Trade Room over the past couple of weeks is the little black trend line up here as a head and shoulders and a reversal for the USDCAD, and we studied that and took some opportunities to go short into the first orange-shaded area up here into 1.2800. So, if you’re still holding those, of course quite profitable at the current moment. So, again, right around this orange zone.
Let’s take it down to the four-hour timeframe of course, and we could see the market in congestion right around this orange-shaded area. Again, we talked about this yesterday in the live Trade Room. One of two things. It’s going to bounce off and go back up. We’d likely look for some evidence of bullish pressure. We’d look for a blue candle. A hammer candlestick. Some indication that there’s a sudden infusion of buy orders. We haven’t seen that yet.
We haven’t seen any real sudden infusion of buy orders in recent day and we don’t have any confidence in the rising trend. The other side of it is we look for a confident breakout underneath the orange-shaded area. We look for it to get underneath there, stay underneath the orange zone and give us a higher clue that it’s going to continue to go lower. So, one of these two things is what we’re looking for.
A rise. A push back higher. An infusion of buy orders right back above 1.2600. And then we look for it to go back up again, or we look for the confident breakout. I don’t think we’ve had that yet, and we look for the continuation down to the green zone. Confident breakout of this orange zone, higher or lower, is what we’re looking for, 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.