The market was fairly uneventful today in terms of setups. So instead of posting a bunch of levels to watch I thought it more constructive to take a closer look at one currency pair from a few different angles. This is a level I’m closely watching on the daily time frame as well as the 4 hour.
USDCAD ended last year with a bang, rallying nearly 1,000 pips from January 1, 2013 to December 31, 2013. Since that time, however, the pair has either traded sideways or trended down. But that may be coming to an end…
As you can see from the chart below, the market is resting on a trend line that dates back to August of 2012. This is confluence #1. Scroll down for more.
Now we come to the opening range for USDCAD. By opening range I simply mean the price at which the pair opened the year (2014).
It’s a little known fact that the opening range can provide a great place to look for support or resistance. Markets have a tendency to respect these levels when they’re tested, as is the case with USDCAD. This gives us confluence #2.
USDCAD is resting on the highs from 2010 and 2011. If that wasn’t enough, this level also lines up perfectly with the 38.2 Fib level when using the start of the trend line. As most of you know I’m not a huge fan of Fib levels, but it can be a useful tool at times. That makes confluence #3 and #4.
The fact that the market is at the 38.2 level doesn’t have much significance, however when you combine it with the other factors we discussed above it certainly plays a role.
So with all that said, am I buying USDCAD?
Nope. Well, at least not yet. I need to see more in terms of a price action buy signal. We have all the confluence we could possibly want at this level, now it’s time for some confirmation.
As a last minute addition we have AUDNZD. I highlighted the trend line break last week and today the market was able to test the level as resistance.
I’m not overly convinced one way or the other at this point. It really comes down to whether or not AUDUSD can break resistance around .944.
Here is my tweet from earlier today regarding AUDUSD along with the AUDNZD chart below.
— Justin Bennett (@JustinBennettFX) June 30, 2014