Transcript of Video
Hello everyone, this is today’s video analysis for January 18, 2019. Today we’re taking a look at the US Dollar versus the Canadian Dollar [USDCAD] for today’s trade analysis.
We’re looking here at the daily timeframe. Over the past week, we haven’t seen a whole lot of change here for the USDCAD. Previously, over the past couple of weeks, saw a significant downtrend. Take a look. Falling all the way from the 1.3650 into the mid-1.3600s, all the way down here into the 1.3200-level. So, significant downtrend.
Since that downtrend, we’ve seen the market go into a period of congestion or ranging. Consolidation as it just holds up underneath resistance. The yellow-shaded area here in the middle of the chart. Follow it back to the left-hand side of the chart. You see the black circle shows historical resistance into this same level. So, there is consistent price action around this level in history.
1.3285, 1.3265 is that yellow zone that we’re studying today. So, for the past week, buying underneath that yellow zone been very limited opportunity. Yesterday it did spike up into the 1.3320-level, but came right back down into the yellow-shaded area. So, buying has been very limited opportunity underneath that yellow zone.
It’s important for me to recognize the fact that in about 45 minutes from the recording of this video, we get significant news. CPI data out of Canada. Several pieces of news popping up there. 8:30AM Eastern US time. Could change the way this looks. If it’s significantly negative for Canada, we may see this take a turn back higher. Significantly positive for Canada though, this may push back down towards the green-shaded area and the historical supports that we’re seeing here for the USDCAD.
So, taking a look at this yellow zone, news or no news, that’s the area to watch for the day today. If we can get it above there, again, negative news for Canada would send this above 1.3285 and a target back to higher levels. First, of course, would be the orange zone and then beyond there, we could look for higher levels to be reached. Maybe this blue zone or the green zone up here would be the next levels to reach for if it presses on through there.
The other side of that story is good news out of Canada. Positive CPI. We would potentially see this bounce off of the yellow-shaded area. Take a target back down at least at minimum to the green zone. And of course beyond the green zone, we have that pink zone way down there at the very bottom of the chart as our next potential support target.
So, we know where the technical levels are. It’s a matter of waiting for the price action and the movement to begin happening here for the USDCAD.
Let’s take it on down here to the four-hour timeframe and you could see what’s been happening. Again, yesterday, it was a very limited run all the way back up to 1.3320. Right back down here into the yellow-shaded area. So, again, the main focus is looking for the breakout under or above the yellow-shaded area.
Now, for some conservative price action, we would look for either the market to actually get above and stay above the yellow-shaded area, or look for it to actually get below and stay below the yellow-shaded area. Those would be a little bit more conservative. Waiting for that to happen. Might miss the move if you have to wait for that to happen, but definitely would be a little bit more conservative. You might even look for just a large bullish candle here. The next candle opening above the yellow zone may be a clue for you as well.
Two things that’s going to affect this of course that we look at quite often in the live Trade Room. Well, three things today. We have the CPI data coming at 8:30AM Eastern US time. We know that the USD index finding resistance right now. If the USD continues to find resistance and goes down, USD falling on the day today, if it does continue that, we would also look for this to potentially go down and fall off again.
So, any selloff of the USD, this may go back down. Any rally on the USD back to that, if it finally breaks resistance, 95.70 or so, the 100-period moving average, we would look for the USDCAD to go up. The other part of that story is crude oil. Crude oil on the rise today. Whatever happens here on crude oil, we tend to look for the opposing view on the USDCAD. And as we could see, on the day today, we’re positive. We’re moving up on crude oil.
If it breaks the resistance, 52.85, 53.20, let’s just say getting through 53 and staying above that yellow-shaded area, heading back into 54s on crude oil, we would potentially look for this to head back down to the green zone or lower. Crude oil goes up; this will go down. USD falling off today; this would go down. Opposite of that of course is true. We would look for this to head back higher towards the orange zone or higher 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.