Still Bullish: Three Crucial Resistance Levels For The USD/CAD
Shain Vernier • 2 min read
The USD/CAD’s winning streak is extending into the third straight week. There are three major technical levels to be aware of as we move forward. Will the USD/CAD continue to post gains as we move towards the end of 2017? Is there an end to the bulls dominating trade?
Let’s take a look at our prevailing trend, key technical levels, and premium areas to trade.
Last week we saw a shift in sentiment towards the USD/CAD. After a brutal three month downtrend, the USD/CAD posted a nice 6-day winning streak.
USD/CAD Weekly Chart- Looking To Stay Hot
Since that time a period of sideways trading has set in on the daily chart. During the early going of this week, the grind higher has continued.
USD/CAD Daily Chart
We may have some topside resistance levels to deal with in the near future:
July’s 62% retracement at 1.2784
July’s 78% retracement at 1.2882
Yearly 38% retracement at 1.2940
Until proven otherwise, the following technicals lend themselves to sticking with the current bullish call:
Currently trading above the 13 Day SMA and 50 Day EMA
MP & SMA Crossover presence on the daily timeframe
Trade established above last week’s high
So What? How Do We Trade It?
All the technicals in the world are no help if we can’t profit from their presence. So far, a daily high of 1.2777 is a proximity test of the 62% daily retracement. I will be looking for a firm test of 1.2882 in the coming sessions.
The intermediate-term call has to remain bullish until we trade under the previous week’s low or the daily moving averages. Stay aware of the following:
U.S. Crude oil inventory stats out later today and tomorrow may drive this market
Friday’s Canadian CPI statistics
For now, I am holding a long bias facing the USD/CAD. The positive economic metrics out of the U.S. are acting as a short term catalyst for a strengthening dollar. Coupled with moderate crude oil pricing, we are likely to see a fading CAD.
So, eyes on the stats, and stay long until we see confirmation the intermediate-term trend is exhausted. Buy entries with positive reward to risk, near the previous session lows are affordable ways to day trade this trend.