Transcript of Video
Hello everyone, this is today’s video analysis for September 14, 2018. Today we’re looking at the US Dollar versus the Canadian Dollar [USDCAD] for today’s trade analysis.
Looking here at the daily timeframe, let me zoom out one time. You could see we’ve had a couple of different trends. Overall, we’re going all the way back about a year ago. Back end of August, beginning of September one year ago, this currency pair has really been in an overall uptrend. We’ve seen periods though within this overall uptrend that had been bearish. Look at this.
We have three periods really. The first here, middle, and now the current downtrend situation. So, the question is: will we see the continuation, the reversal, the downtrend continue to go down, which is basically a selloff of the USD, weakening of the USD and against the USD, strengthening of the CAD as this pressures lower, or will we eventually see the USD explode, go back up again and the CAD fall, which would send this currency pair higher?
Again, that’s kind of up in the air at this point, but I just wanted you to see this viewpoint. The rising long-term trend and the short down trends within there. We see a couple of times challenging underneath the 100-period simple moving average, but a majority, again, of this price action being above there. Currently we’re underneath that 100-period moving average.
Now that we’ve seen that long-term viewpoint of this currency pair, let’s zoom it in. And you could see the downtrend. Several days ago, we were above it and market turned right back around and went back underneath there. We were above the 100-period moving average. We’re right back underneath there. We’ve been there before recently as well. Underneath the moving average and eventually turned right back above it.
So, again, calling the direction of this currency pair has been kind of difficult over the past two weeks or so as the market was significantly in an uptrend and now it’s turned into a downtrend. So, we have to figure out which direction on a daily basis basically to trade the USDCAD.
Currently we are sitting under the resistance zone right around 1.3000, 1.3025. That’s the pink-shaded area you see here towards the bottom of the chart. You could see yesterday was underneath here. Today we’re underneath here. We could see historically, just going all the way back to the left of the chart, you see resistance under the pink zone. Support at the green zone. I just want to highlight that, where I’m looking. Let’s just take a little circle here and put it back here on the left.
There you go. Right there, where that circle is, you could see resistance at the pink zone. Support at the green zone for several days. We’ve seen it at other periods as well. Here we go right here, where we see resistance at the pink zone and support at the green zone for a few days there as well. So, it’s nothing new. We’ve seen it do this before. So, the question is: today, will we see it stay under the pink zone and target back to the green zone, which of course would imply a couple of things? We’re looking for a selloff of the USD, which we’ve seen in the past few days, which would send it back down to the green zone again. But if we see a new rally on the USD, we may see it pressure right back above the pink zone, 1.3025, and go back up again.
We know there’s potential resistance along that black trend line. We’ve seen it before. Potential resistance along the 100-period moving average. So, that’s something that we need to pay attention to as well. Pressuring to the green zone would be our first target. Below the green zone of course on the selloff would mean that it heads back down to the next support, the blue zone. Not too hard to see that as you see it right here.
Pressuring higher, we already know what the resistance is, but we also would look for it to head back to potentially this yellow-shaded area as the next resistance. So, we know where the decision points are, and that’s what I’m trying to highlight on a daily basis for you. These colored, shaded areas being our major areas of decision making, where the market – not you and I, but the entire Forex market has made decisions to buy, sell, enter, or exit the market, because we see candle bodies and highs and lows stopping, stalling, turning, and breaking these specific levels on a consistent basis.
And you could see that happening here at the pink-shaded area. Let’s just zoom it in one more time. A couple of other things. Fibonacci. Let’s go from the low here all the way down here to the high with Fibonacci. We find the .618 Fibonacci retracement level sitting at 1.3017. Guess what. That’s right smack in the middle of our pink-shaded area. So, again, what that tells us is as long as it’s underneath that .618 fib of that previous leg of the uptrend, there’s potential for it to find resistance and go back down to the next fib. Happens to be the .786 here at the green-shaded area.
And a break back above the.618, may see it go back up again. So, again, that’s very interesting for the current market value. Let’s just take another fib. Let’s take fib from the high, down to our most recent low yesterday. And that puts the .236 at 1.3035, just above our pink zone. So, we see a little bit of Fibonacci into the pink zone.
So, what this tells us, again, is as long as it’s under here, we’re at resistance. And if it breaks back above there, we’re looking for it to go back up.
Down to the four-hour timeframe. Again, look at this on the four-hour timeframe. It’s not too hard to see where your resistance is currently for the market. So, if you’re going to trade this, at least right now, doesn’t make a whole lot of sense to go long, until we get further information. Buying, going long into and underneath this pink zone just doesn’t make sense. It would have to get back above there if you were going to buy or go long.
It makes more sense for the short side underneath the pink-shaded area. Of course we’ll look for the news later in just about maybe 35, 40 minutes from the recording of this video. We get some more US data popping up maybe. If that becomes negative, we see it head down to the green zone or the blue zone. Another surge lower on the USD, of course this sends it lower. If there’s positive movement on the USD at all, we look for it to break higher.
So, don’t buy it right now. Only buy it if it breaks the pink zone. More likely looking for the short side here on the USDCAD 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.