Key Fibonacci Support Level For The USD/CAD
Shain Vernier • 1 min read
For seemingly the first time all year, trade is tight across the forex. Volatility has been the rule for 2018 and it appears traders are taking a breather midway through the U.S. session. As I prepare this update, there is a live trading signal facing the USD/CAD that is performing extremely well. If you are in on the action, kudos!
Trading the USD/CAD ahead of the weekly crude oil inventory cycle is a sound way of capitalizing upon the commodity/currency correlation. Today’s API Weekly Crude Oil Stock and tomorrow’s EIA Crude Oil Inventory Report are poised to drive volatility facing the Loonie.
For now, there is a key Fibonacci support level that may come into play in the coming 24 hours.
Thus far it has been a positive session for the USD/CAD, posting a rally of 25 pips. The 1.2600 handle is a key level in this market and has brought both buyers and sellers to the market for the past three sessions.
Here are several of the important levels to watch in the coming hours:
- Resistance(1): Swing High, 1.2682
- Resistance(2): Psyche Level, 1.2700
- Support(1): 38% of Current Bull Run, 1.2517
- Support(2): Bollinger MP, 1.2492
Bottom Line: In the event that we see a concerted selloff in the Loonie later this week, the 38% Fibonacci level of 1.2517 may come into play. A buy entry from 1.2526 with an initial stop at 1.2491 is a good way to enter this market with the prevailing trend. This trade setup may be executed using a 1:1, 1:2, or 1:3 R/R trade management plan.
The crude oil inventory cycle will have a tremendous bearing on whether or not this trade goes live. With any luck, a pullback after tomorrow’s EIA release will create the environment necessary for a positive trade.