Transcript of Video
Hello everyone, this is today’s video analysis for January 14, 2019. Today we’re taking a look at the US Dollar versus the Canadian Dollar [USDCAD] for today’s trade analysis.
Let’s take a look at the daily timeframe first. Previously we were in an uptrend. Not too hard to see along the red trend line channel that we drew out here. We saw the market going up, making dips within the uptrend. Rallying. Dips to support. Rallying. Within that overall uptrend, we had opportunities to take longs and share in some of the profit as the market went higher.
Then it reached a high all the way up here at 1.3650 into the blue-shaded area at the top of the chart. And since then, has been in a dramatic pullback or fall here for the USDCAD. We’ve also seen in recent weeks, in the same period timeframe, crude oil taking significant rally. Crude oil going up, we see the USDCAD going down. And so, that’s one of the clues that we typically watch in the live Trade Room, is how is the market reacting to crude oil, rising and falling, prices going up or down, and tends to have an exact opposite reaction here on the USDCAD.
So, crude oil has been rallying significantly in the past few weeks, and so now we see the USDCAD going down. So, very interesting there. We also note that the USD has been falling in recent weeks. Over the past couple of weeks, we’ve seen the USD going down, and that also contributes to the fall here on the USDCAD. So, kind of the perfect storm. Crude oil going up. USDCAD falling. And that sends the USDCAD lower.
Now we do see today and Friday crude oil pulling back a little bit. We see the USD going back up a little bit, and that has led to a little bit of a pullback into resistance here for the USDCAD. So, the question of the day will be, and let’s go ahead and zoom it in a little bit here: will this yellow-shaded area, 1.3265, 1.3285 hold as resistance for the market to turn around and go back down and continue the downward momentum, or are we in for a change of that momentum? Will the market get back above 1.3285, 1.3265?
So, we’re watching. Again, we keep an eye on those other two outlying factors. What’s the USD doing? Will it find resistance and go back down? What’s crude oil doing? Will it find support and go back up? We’ll take a look at those in the live Trade Room later today, but we’re watching those to help us give us clues to what we might do here at the yellow-shaded area.
Clearly the green zone – 1.3225, 1.3205 – is your current support for the USDCAD. Just one last thing. Zoom out again. Look back to the left-hand side. You see the black circle back here on the left. There’s precedent for resistance here into this yellow zone. We’ve seen it before. Take a look at that black circle. Resistance here. Market turned around and went down. Made new lows. So, keep that in mind. We have a precedent of price action around this yellow-shaded area.
Take it down to the four-hour timeframe. Look at this. We see the market finding that support here at the green zone. Rallying back into the yellow zone. So, again, the yellow zone is the main area focus for the day today. Will we see the market turn around and go down? Will we see the bears come in and drive the price back down, or will the buyers come in and finally be able to get the price to push above and stay above the yellow-shaded area?
We don’t have that kind of information yet. I don’t think there’s enough information to tell us one way or the other right now. Will it break above? Will it reverse here? But that’s what we’re watching for today. Some clues to one of those two things. Will we watch for return of the downtrend or the break of resistance for 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.