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I’m going to get started today on the US Dollar versus the Canadian Dollar [USDCAD]. Starting all the way out here Monthly Chart, the largest time compression, so we can get a longer-term overview because we are currently reaching into high points or resistance levels that we haven’t seen for multiple years.
We’re going all the way back to the left-hand side of the chart, where we started up here into 2009, early 2009, into the 1.3000s, top of the chart. Then we took a fall all the way back down here for the next couple of years into 2011, back down to the 0.9400-level. Since 2011, we’ve seen a pretty decent pullback of that previous downtrend, the multi-year downtrend, as we’ve gone from 2011 down here, close to 0.9400, back now into the 1.1400s as the market has returned back higher, a little bit further than halfway up this previous downtrend.
So, interesting there. Taking Fibonacci from the high, down to the low of the previous downtrend. Like I said, we’re just a little bit above the 50% retracement level. That’s a little bit difficult to see here on the chart, but it’s right in the middle of the chart; is where the 50% is. And we could see the .618 Fibonacci retracement level at 1.1665, a little bit above the current market.
Take into account where these red, horizontal lines are as you could see them here on the chart. One here right around the 1.1465-level, and then you have two right here that are up into the 1.1600s. So, take into account where those are in relation to the current market, so we could see how that affects the current market when we get down to smaller time compressions.
Follow those red lines back in time. You could see historical resistance back up here. Remember, this is the Monthly Chart, so a couple of months finding resistance into the 1.1600s. We see some support over here on the left-hand side, into the 1.1600s. This is an interesting timeframe back here because you could see the support also found right around this horizontal, green line into the 1.1360s, and that’ll be interesting as we get down to smaller compressions too.
So, the horizontal, green line, the two or three red lines, and the Fibonacci level at 1.1665. All those are what we want to pay attention to as we go down to the smaller compressions in the direction of the current uptrend that we’re in on the USDCAD. Take it on down to the Weekly Chart, and this is beginning to make a whole lot more sense why we were looking at that. You could see, of course, we’ve been in an uptrend. It’s made multi-year new highs here for this currency pair right to the 1.1465 level, the first red line, and we’re currently sitting just above the green line and of course in the direction of the current uptrend.
We have not seen any clues or evidence of trend reversal. The trend just continues to pressure higher for the USDCAD. Forex Black Book trend bar is also green. That’s not too surprising or unexpected since we’ve been in a long-term uptrend here for quite some time for the USDCAD. Take it on down to the Daily Chart. Now we’re beginning to see some opportunity take shape here for this currency pair.
We’ve already discovered where the green line, where the red lines come from here for this currency pair. We could see our last resistance high right here. This last resistance high will help us identify support, and we can see that currently. Over the past two days, yesterday and today, now finding support on top of that green line, that orange-shaded area. In the direction of the trend, of course we’d be looking for potential buying opportunities, and we could see even putting a shorter trend line here, the red trend line showing us we’re still in an uptrend. No reason to believe that has changed.
So, as we listed out here, we know that our resistance high is this red line up here. That is 1.1465. The closer we get to that red line becomes very discouraging about buying in the direction of the trend. If you’re going to buy a currency pair, you want it to go down into support, which we’ve already identified as the orange-shaded area. And of course the next support would be the purple-shaded area, and that’s of course down here next to this red trend line.
Let’s take a couple of Fibonacci retracement measurements on this chart. I’m going to, first off, take the longest one. Let’s go from the lowest low down here at the bottom of the Daily Chart to the current resistance high. That’s interesting because it does put the .236 fib right at 1.1266 in the middle of that purple-shaded area. So, that would help us identify that as support, and of course we see this congestion back here.
Let’s go ahead now and take this information down to the 4-Hour Chart. As we get down here to the 4-Hour Chart, and let’s zoom it out one time. As we get down here, we could see our historical resistance highs here. That is offering several hours of support here right into that green line, the top of the orange-shaded area. So, again, if you’re looking for an opportunity, this is becoming quite a nice opportunity for support in the direction of the uptrend. Your risk in that scenario of course is that it doesn’t find support and breaks down and starts going back down to the purple-shaded area.
So, again, when you’re trading in the direction of the trend, you’re looking for low risk, high reward opportunities. Buying support becomes a much better opportunity than of course buying into resistance, which is at the top of the chart. So, we’re becoming much more attractive today for buying support for the USDCAD. Now, all that could change of course if it breaks down underneath 1.1330. We’re back to the purple-shaded area for the USDCAD.
So, this area is very attractive for buying or the day today. Let’s go ahead and zoom it in one time. Let’s take Fibonacci from the low here, down at the bottom of the chart, now on the 4-Hour Chart. The current uptrend that we’ve seen here. From the low to the resistance high, very interesting here is that the .236 fib is right where the current market is finding support here. So, that’s what we’re going to look for today.
1.1380, 1.1370, the top of the orange-shaded area, the green line, the Fibonacci, .236 that sits there. That is our support today. If you’re going to buy this currency pair, that’s likely a spot to do that. Now, if it breaks down through there, of course your next area or barrier will be the bottom of the orange zone. We could see 1.1330. That is the bottom. That happens to be the .382 Fibonacci retracement level. I suppose if you’re looking for a risk assessment, you’re either looking for very small risk stops right around the 1.1360-level, mid-part of the orange zone, or your larger risk would be underneath the orange-shaded area if you decide to buy the USDCAD in the direction of the trend.
I don’t think there’s any reason to believe at this current moment that you would want to sell the USDCAD at the current moment. Of course we have news coming up over the next couple of days. Definitely something that we’ll pay attention to, but at the current moment, does not become an opportunity to sell this. I think if you’re going to sell it, it’s more ideal to look for it to rally back to the 1.1460-level, look for top resistance once again, or possibly even higher. As we’ve already identified from the Monthly Chart, there is a longer-term resistance all the way up here into the 1.1600s, much further up.
We still have some upside targets here for the uptrend in the direction of the long-term trend for the USDCAD this week.
Hi,
If you would have given a daily, shorter term analysis, it could be very interesting for me