Key Fibonacci Support Level For The USD/CAD
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.
USD/CAD Technicals
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.
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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.
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