Transcript of Video
Hello everyone, this is today’s video analysis for January 3, 2019. Today we’re taking a look at the US Dollar versus the Canadian Dollar [USDCAD] for today’s trade analysis.
Looking here on the daily timeframe, we could see that this currency pair has been in an uptrend for a while now. You could see the uptrend channel if you will between the two rising trend lines. The two red rising trend lines here on the right-hand side of the chart. The market has been bouncing around between them for quite a while now. In fact, reaching the highest peak high into the 1.3650, 1.3680-level, the blue zone at the top of the chart and the top of the channel in the past several days.
Take a look at that. Five days capping out at the blue zone at the top of this channel. Something else we can point out. Let’s go out to the larger timeframe, the weekly timeframe. Look at this different viewpoint of the trend. The rising black trend channel, where we see rising lows, rising highs going on since July of mid-part of 2017. We’ve really been in a long-term rally and rise here for the USDCAD.
So, significant high is being met. You could see the last time we were here all the way back here in April and May of 2017. The last time we were into the 1.3600s and 1.3700s was the last time we were here and here we are again. So, there’s decision to be made here by the market. The top of this black rising channel. Is it going to continue to rise as it has been for the past several months, or is it time to touch the top of this trend channel as it has a few times back here in 2017 and 2018 and turn around and go back down to the bottom, which is down in towards the 1.3200, 1.3300-level at the bottom of the black rising channel here on the weekly timeframe.
Back to the daily. So, we’re in this decision point. Take a look at this black box. Let’s zoom in one more time. Maybe twice. Take a look at this black box up here. You could see the black line here representing that rising weekly channel. We’re up here at the top of the red channel, but seven days. We could call it eight if you want to count this one as well. We’ve been challenging this pink zone, 1.3570, 1.3600 as the support and the blue zone, 1.3650 as the resistance level.
So, the first things first. Part of your decision-making process is should I trade or should I not trade. The first thing I would say about should I not trade is you probably are not looking to go short yet. Going short in the past five, six days has not been a good idea above 1.3570. Take a look. Every time it’s come down here into it, above 1.3570, we’ve seen the market bounce back up. So, going short right now is difficult.
The only real good reason to go short I believe would be that it finally gets underneath this pink-shaded area and the 1.3570-level. So, getting underneath there, sure, we have an opportunity to take a short to the yellow zone, the bottom of the rising red channel. Potentially a whole shift of the trend going back down again as we looked at that larger trend channel. So, sellers taking note. Saying 1.3570 is support. If it gets through there, we have an opportunity to go short. The other side of that of course is hey, should we go long. And that’s I think a difficult scenario as well given the fact that we’ve seen more bearish price action on the day than we have bullish.
We do see oil, crude oil, taking a little bit of a rise today, and that we know as we study in the live Trade Room every day. Crude oil rising is good news for Canada. Good news for the Canada sends this currency pair, USDCAD, lower. We know that tomorrow we have significant news out of US and Canada. Non-farm payrolls out of the US. Canadian employment data out of Canada. That has an impact here. So, rising and falling crude oil has an impact. Rising and falling CAD. Rising and falling USD. All has a potential impact.
So, the question is what do we do with this today. Well, first things first. Again, I don’t think we sell it until a breakdown of 1.3570. Buyers are being wary and watchful for infusion of buy orders. Let’s take it down to the four-hour timeframe. Here we go. Let me squeeze it back out like this. And again, right now we have no indication of buying pressure. It’s just challenging lower.
Several hours ago, we saw the market hit here. Hesitate for about a four-hour period and then rally back higher. So, again, I think we need to wait for at least some hesitation here before we look for a long shot into the pink-shaded area. Of course your risk is smaller right now for buying. Your risk stop loss would be underneath the pink zone. That way, if it breaks it, you minimize the impact.
I just don’t think that there’s enough buying pressure yet to satisfy the buyers here and see it go back up to the blue zone once again. So, I think really the main focus here is does oil continue to rise for the day today. Does the USD fall off its resistance high that we’re challenging today? Does tomorrow’s news out of Canada and the US impact today’s market and sentiment for the USDCAD as well? So, the first thing we’ll talk about in the Trade Room today will be the potential breakdown of 1.3570 for the USDCAD.
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.