Fibonacci Support In View For The USD/CAD - Forex News by FX Leaders
USD/CAD

Fibonacci Support In View For The USD/CAD

Posted Thursday, June 28, 2018 by
Shain Vernier • 1 min read

Today’s action in WTI crude oil futures has been a breath of fresh air to the Canadian dollar. Pricing for the USD/CAD has fallen significantly, bringing an area of Fibonacci support into play. With a bit of luck, price will continue to grind south and create a nice trading opportunity later today.

USD/CAD Technicals

After this week’s poor crude oil inventories cycle, August WTI is on the march to $75.00. As a result, the USD/CAD is off considerably, illustrating a resurgence of the CAD.

USD/CAD, Daily Chart
USD/CAD, Daily Chart

Here are the levels to watch in the USD/CAD for the remainder of the session:

  • Support(1): 38% Retracement, 1.3219
  • Support(2): Bollinger MP, 1.3098
  • Support(3): Daily SMA, 1.3002

Bottom Line: The distance of Support (2) and (3) from current price is instructive of the prevailing uptrend in the USD/CAD. The Bollinger MP and Daily SMA are nearly parallel and at a 45-degree upward trajectory well below price. This is an indication of a strong bullish presence. A buy from above the 38% Fibonacci retracement of the current wave (1.3219) is a solid way to join the uptrend on the daily time frame.

For the remainder of the week, buys from 1.3226 offer a good location to the long. Using an initial stop at 1.3194, this trade may be executed using a 1:1 or 1:2 risk vs reward scenario. Either way, the long play returns 32 or 64 pips.

As of this writing, August WTI crude oil futures are pushing intraday highs above $73.75. Look for this trade to go live by today’s session close.

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About the author

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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