Potential Daily SMA Short For The USD/CAD
Shain Vernier • 1 min read
The USD has had a decent session across the majors, regaining a some of the lost momentum from last week’s irregular action. With gains against the Euro, Swiss franc, and Canadian dollar, perhaps the greenback will put together a substantial winning streak as we reach November’s end.
Today’s action in the USD/CAD has set up a potential trade for the late U.S. forex session. Let’s dig into the technicals!
The price action on the daily timeframe illustrates the chaotic trading that defined last week. Today’s session has shown the USD to be posting some gains against the Canadian dollar. If we continue to see concerted buying, a short trade from the Daily SMA may develop.
USD/CAD, Daily Chart
Since the test of 2017’s 50% Fibonacci retracement during late September, price has rotated with sideways action between macro retracement levels. Currently, this market is entering consolidation waiting for a fundamental stimulus to create a directional move.
Here are the key support and resistance levels:
Support(1): 20 Day EMA, 1.2724
Support(2): 38% of yearly range, 1.2722
Support(3): Bollinger MP, 1.2716
Resistance(1): Daily SMA, 1.2771
Resistance(2): Last week’s high, 1.2836
Resistance(3): 50% yearly retracement, 1.2926
Bottom Line: A 1:1 R/R short from 1.2771 with an initial stop above 1.2800 will produce a 30 pip profit if successful.
This level is valid for the remainder of the U.S. session. In the event that it goes live and remains open into the close, be sure to tighten the stop to just above the daily high and adjust the profit target to reflect the new R/R expectation.
As always, trade smart and for tomorrow!