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USDCAD at Risk Below 1.3015

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Important: I use New York close charts so that each 24-hour period closes at 5 pm EST.

Click here to get access to the same charts I use.

The USDCAD is in the process of extending losses that began in late June. Ever since the daily close back below ascending channel resistance on June 29th, I’ve been relatively bearish.

Then came the July 25th break below short-term trend line support. Yesterday’s session didn’t quite make it back to the 1.3120 area, but it did revert to the daily mean as represented by the 10 and 20 EMAs.

Another level I’ve mentioned a few times recently is 1.3015. Yesterday’s session appears to have cleared the level, and so far today sellers have defended the area.

It seems then that the USDCAD has entered the next leg down. This new range extends from the 1.2870/80 support area to resistance at 1.3015. Of course, if today’s session closes back above 1.3015, we’ll need to reevaluate things.

Remember, I use New York close charts, so everything is based on the 5 pm EST close.

At the moment the bearish reversal that began late last month is alive and well. And as I stated in the previous commentary, I do see the potential for an extended move lower toward channel support near 1.2550.

To do that, sellers would need to clear 1.2870/80 followed by 1.2740/50. Those are the next two key support areas I’m keeping an eye on.

As for noteworthy market movers, we have a Fed rate decision and statement in a few hours at 2 pm EST. Then on Friday, we have non-payroll along with the latest trade balance out of Canada at 8:30 am EST. All of the above will move the needle for the USDCAD.

I won’t be trading the pair anytime soon given that I’m still short the EURCAD from late June and probably will be for some time, and I’d rather not double up on the Canadian dollar.

USDCAD new daily range

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15 comments
Nigel says

Great stuff Justin. Many Thanks

Reply
    Justin Bennett says

    Cheers. You’re welcome.

    Reply
      Ehsan says

      Hey Justin well done buddy as usual

      Reply
      shashidhar says

      Excellent Justin>…

      Reply
Jeffrey says

Great work, Justin! I appreciate the effort you put in to help traders. Im intrigued by your statement of “rather not double up on the CAD”. I seem to be heavy on the CAD with several trades (EUR/CAD, USD/CAD), including the GBP/CAD (but I’m bearish the GBP). My question is how much “weight” do you put on the particular pairs when deciding on how heavy you take positions? Do you consider % of portfolio? Do you factor in the “other” currency in the pair? Just wanted to get some input from you on this. Thanks

Reply
    Justin Bennett says

    I don’t think about it quite that much. It comes down to the fact that I’d rather focus on EURCAD and scale in than spread myself across two or three CAD pairs. Scaling in allows me to achieve a similar return without needing to concern myself with more than one currency pair.

    Reply
      Olorunsola Tolu says

      For me I want to wait till it rebounds to nearest resistance before selling this pair. I see much potentials in this pair because EUR just began its weakness and Cad just began its strength. But I can’t short it at this level to avoid story that torches the heart. Lol

      Reply
matt says

ur right justin, thks for the update

Reply
    Justin Bennett says

    You’re welcome.

    Reply
Yusuf Ahmad says

Another good one. thanks

Reply
    Justin Bennett says

    Anytime, Yusuf.

    Reply
Joel says

Thank you so much Justin for the setups. Tomorrow is NFP, what is your recommendation regarding the USD positions that are already open?

Reply
    Justin Bennett says

    You’re welcome. That isn’t my decision to make. You should have your own rules for that situation.

    Reply
Econium says

thanks a lot justin

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Aliahmad says

Hi and thanks for continuous supports.How about USD/CAD now, it has been closed above 1.31. Does it mean trend is bullish again? August 13,

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