USD/CAD Long Entry: 1.2552-1.2543

The USD/CAD experienced sustained weakness yesterday as the FOMC minutes battered the USD. As of now, we have traded under last week’s low, bringing the long-term bullish call into question. But, there is a great long entry from 1.2552-1.2543. Let’s take a look why…..

Technicals

Technical indicators work best when they converge. Just like a good party, the more the merrier.

USD/CAD Daily Chart- Will We Get Our Long?

Several aspects of the 1.2552-1.2543 level give it some credence for a long:

• The July low/August high 62% retracement at 1.2552

• Nice round psychological level at 1.2550

• 13 Day SMA at 1.2543

• Trade is currently between the midpoint of the Bollinger Bands and the SMA

• Our MP and SMA crossover from August 7th is still valid

Bottom Line: I look for the USD/CAD to chop sideways as the FOMC minutes are being fully absorbed. In many ways, yesterday’s plunge was unwarranted. The selloff in crude oil should have stabilized the market a bit.

The trade here is to be long from 1.2552-1.2543. Either scalp or position trade, just be sure to line up the R/R. The stop for an intraday long would be below 78% of the move, or 1.2493. Long-term trade will be below July's low, 1.2413.  

We are trading well above that range now, but tomorrow’s Bank of Canada releases could very well bring us into play. Until we confirm below this level, I will hold onto my bullish outlook.

ABOUT THE AUTHOR See More

Shain Vernier

US Analyst

Shain Vernier has spent over 7 years in the market as a professional futures, options and forex trader. He holds a B.Sc. in Business Finance from the University of Montana. Shain's career includes stretches with several proprietary trading firms in addition to actively managing his own accounts. Before joining FX Leaders, he worked as a market analyst and financial writer.

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