USD/CAD Finds Support At 1.2800, Fibonacci Short In Sight
Shain Vernier • 1 min read
Monday’s U.S. session is going to be a tough act to follow. Equities, commodities, and forex traded with heavy volumes, with many making directional moves. When the dust cleared, we witnessed WTI crude oil close above $75.00, whipsaw action in the U.S. indices, and a bullish USD. One of the most active currency pairs was the USD/CAD, opening GAP down and continuing the bearish sentiment.
Today may be a bit calmer in terms of action. Participation will remain strong as we are into the fall trading season, but there will be no news like USMCA to drive participation. A mild economic calendar is the order of the day. The only potential market mover scheduled is the U.S. FED Chair Powell speech at 12:45 PM EST.
The USD/CAD was the story of the Sunday/Monday forex session. Trade opened the week GAP down, sending forex players to their screens en masse.
Here are the key levels to watch for the remainder of the U.S. session:
- Resistance(1): 38% Current Wave, 1.2896
- Support(1): Psyche Level, 1.2800
- GAP, 1.2847-1.2904
Bottom Line: For the remainder of the week, I will have sell orders queued up from beneath the 38% retracement at 1.2894. Using an initial stop at 1.2926, this trade produces 32 pips on a rotation back toward the bear.
GAPs in pricing have a tendency to be tested and filled. The USD/CAD daily chart has a nice one on the weekly open, with a range from 1.2847 to 1.2904. In the event this area is tested, a sell from the daily 38% current wave retracement is a good way to play rotation from the top of the GAP.