Today I’m going to show you where I think USDCAD is heading in the coming days.
I’ll discuss the recent fakeout from the pair, and what it means for the rest of October.
I’ll also share the latest on the US Dollar Index (DXY), so you can trade the major currency pairs with confidence!
Watch the video below and scroll down for the annotated charts and analysis.
USDCAD gave us a setup in our VIP trading group on Friday, which was active as of yesterday’s session.
For those who’ve watched recent USDCAD videos, you know about the March 2020 trend line at 1.3670.
The pair managed a breakout there last week but failed to hold it into the weekend.
We also saw USDCAD close last week below the most recent swing high from early September.
All in all, the pair looks relatively bearish.
However, the wildcard here is the US Dollar Index (DXY).
The index remains above the 105.60 key level, so traders have to be careful shorting the USD despite the recent bearish (short term) momentum.
If the DXY fails to hold above 105.60 in the coming days, a more significant dollar correction to 104.30 seems likely.
Alternatively, dollar strength from 105.60 must be respected while prices hold above that mark.
As for USDCAD, a retest of 1.3520, followed by a retracement higher seems the most likely scenario from here.
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