Today I’m going to show you exactly how I’m trading USDCAD over the next few weeks.
Check out the USDCAD video below and scroll down for the annotated charts and analysis.
USDCAD broke below the November trend on the 13th, and bulls failed to reclaim the level following last week’s FOMC.
We’ve since seen the pair drop 140 pips, but relief isn’t far away.
I mentioned the potential for a breakdown from that level on the 13th.
Another key USDCAD level I wrote about last week is the June 2021 trend line.
That level comes in near 1.3080-1.3090 over the next few weeks.
That will be a significant test for USDCAD, likely triggering a bounce.
We also have the bottom of a descending channel intersecting with the 2021 trend line over the next two weeks.
It makes this a confluence of support at 1.3100.
USDCAD may test the bottom of this channel at 1.3130 before reaching the June 2021 trend line, but I’ll wait for 1.3100 before watching for a buy signal.
Resistance from there will be the channel mid-range, followed by the November trend line at 1.3350.
Another 100 pips of downside for USDCAD seems likely before a bounce.
Alternatively, a sustained break below the June 2021 trend line over the coming weeks would signal the next leg down for the pair.
But regardless of the market’s future direction, trading USDCAD level to level makes the most sense right now.
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