Daily Price Action
Shares

USDCAD Hints at Short Setup, but Daily Close Is Key

Shares

Important: I use New York close charts. Click Here to Use My Preferred Broker

USDCAD bears are on the move for the fifth straight day. The pair has pierced range support at 1.2670 on the intraday time frames, including the 4-hour chart.

We’ve had our eye on this 240 pip range since December 6. At the time, the pair had just formed a bullish rejection candle and was bouncing from the 1.2670 handle.

A few days later, USDCAD sellers defended the range top at 1.2910. They eventually succeeded in pushing prices lower, particularly last Wednesday’s 90 pip decline.

The key to this pattern has been a daily close (5 pm EST) below support or above resistance. So far, neither of those have occurred. That has left me on the sideline for the last three weeks.

Even today’s price action hasn’t given us a signal just yet. Notice how the session on December 5 also dropped below 1.2670 on an intraday basis, but buyers stepped in to close the day back above range support.

Will today do the same?

We’ll have to wait and see. If today’s session does close (New York 5 pm EST) back above 1.2670, we could have another bullish rejection candle on our hands. It would keep the 240 pip range intact and also maintain pressure on the range top at 1.2910.

If on the other hand, USDCAD bears manage a 5 pm EST close below 1.2670, it would signal a range break and expose the next key support at 1.2420.

However, due to thin trading conditions and the December 5 low, I will require bearish price action on a retest of 1.2670 before considering an entry. It would also help ‘reset’ things given the considerable distance between the current price and the 10 and 20 EMAs.

But first sellers need to produce a sub 1.2670 close today. If they don’t, all bets for a move lower are off. I’ll be on the sideline until a favorable opportunity presents itself.

Want to see how we’re trading this? Click Here to Join Justin and Save 70%

USDCAD 240 pip range on daily chart

Leave a Comment:

7 comments
Bonang says

Hello sir can you please invite me on the telegram chat room I want to share some few information with. My name is bonang check me on you channel.

Reply
ERIC says

THE QUESTION RIGHT NOW, IS THE USD/CAD GOING TO RETEST THE 1.2670 OR IS IT HEADING STRAIGHT THE 1.2420 LEVEL. A DAILY CLOSE IS KEY.

Reply
Nirmal says

It’s not 100% sure after closed below 1.2670 will be go down may be it will be the false break and turn back to 1.2900 level. It’s just Bennett thought and he was explained the probabilities. Think always 3 way market going down up or sideways. Every predictor will show his her predictions after market movements not exactly before.

Reply
    Pierre Mifsud says

    I think it will retrace close to the 0.382 fibonacci level close to 1.2650 , thereafter it will reach south towards the 1.2450

    Reply
      Pierre Mifsud says

      Retracement is definitely in the making since according to the 10 EMA the difference from the candlestick is in excess of 140 pips, so it has momentarily been oversold. But then it will move south towards 1.2450

      Reply
Pierre Mifsud says

Wave AB down is complete. So it MUST retrace back as wave BC up TOWARDS the 0.382 at least due to an over-extension. Then when it reaches the EMA it will continue to move south as wave CD EXTENSION towards the 1.2450. Hope this helps

Reply
Add Your Reply