Transcript of Video
Hello everyone, this is today’s video analysis for February 5, 2019. Today we’re taking a look at the US Dollar versus the Canadian Dollar [USDCAD] for today’s trade analysis.
First things first here on the daily timeframe, it’s a downtrend. We could see that over the past several weeks, we go even back to the top of the chart. We see an overall long-term downtrend as we’ve seen the market price moving from all the way up here into the 1.3650-level, top of the black trend line all the way down now into the 1.3100-level.
So, quite a long-term downtrend. We did get a little bit of an uptick here in the middle of the trend, where the market pushed back up for a period of time, but then quickly returning to the downtrend, pressuring to the bottom. So, the question is: will the downtrend continue, or will we see some reversal somewhat like what we saw here in the middle of the trend? We don’t know that, but we’ll watch for evidence and clues to that.
A couple of things to think about. The things that affect this currency pair. USD strength or weakness. We have, in the past couple of days, seen the USD making somewhat of a comeback. USD has been pretty resilient in the past several weeks, where it will make a fall, but then come back pretty nicely. That’s one factor. USD strength or weakness, and of course we know we have speech from President Trump coming up this evening.
Something else that can be a factor here is crude oil. Crude oil falling and rising has an effect on the CAD, the looney, and we could see that have an impact here. And of course anything else that affects the CAD as well as far as economic data. So, we have several factors that can impact this here. Let’s just take a look at two of them.
USD index has been rising. Look at this. The past week or so, been pressuring higher. Found support down here just around the 0.9500-level, now pressuring its way back up into the mid to upper-0.9500s into the blue zone. The question, again, is will it continue to rally. Will the USD continue to go up even after the President speech this evening, or will it turn around and go back down?
Like I said, it’s been somewhat resilient. While the market has pressured it lower, it’s bounced back up pretty nicely over the past week or so. So, again, will the USD continue to rise? Will it fall? We’re into resistance now. That’s still a question out there.
Taking a look at crude. The past several months, going all the way back to December – I guess a couple of months now – and back to December, pressuring higher along the blue trend line, making new highs in the past couple of days. Yesterday, the new high up towards the 56-level. Crude oil then pressuring back down and sitting into support. We’ve seen it do that before within this rising trend, where it’s coming back into support.
Interesting here, and let me just grab one of these circles right here and just bring it right here. So, this resistance now right here, where the black circle is, becoming our support zone. The green-shaded area, 54.10, 54.55. Our support today for crude oil if it finds support, may rally and of course if it breaks that support, may fall. So, interesting area.
So, whichever way crude oil goes – rise or fall of crude -, we would look for the opposing viewpoint on the USDCAD. So, a rising crude, USDCAD would go lower. Falling crude, USDCAD goes higher. So, we take the clue that the past two days have been falling on crude. We look at the USDCAD and it’s going up. So, that should give you some clue to that as well.
So, the question is will crude find support. What’s the USD going to do as we go forward throughout the day? Those are some of the big questions we ask about this currency pair. Again, zoom it all the way in here. You could see the blue zone. 1.3105, 1.3120 is that discussion area. Will it break back higher and reverse this falling trend and start rising again, continue to pressure back towards the pink zone as resistance or even the green zone as resistance near the 100-period moving average, or will it find resistance today, the USD selloff, the CAD rally and we’ll look for it to continue to go back down in the direction of the trend?
I will point this area out here. We did see the market come up. Find resistance around this yellow zone here for a period of time. So, that’s an interesting example of what we’re talking about right now for the USDCAD as we sit within and underneath this blue-shaded area, 1.3120. So, we’re watching this area.
Let’s take it down to the four-hour timeframe. Again, nothing really too surprising here. We do see the breakout under the blue zone. Challenge back above it in the past 24 hours, but couldn’t sustain that hold. Now back inside. So, again, it’s all about what’s going to happen here. Will it get underneath? Will it break back above? Keeping an eye on the USDCAD for the day today.
From Forex Traders Daily, this has been your daily analysis with Ross. If you would like to get Ross’ analysis on all the currency pairs he’s watching and all the trades he takes today, join him in his live Trade Room by clicking on the link below. Please leave any comments you have about today’s video in the comment section below.