USDCAD could be setting up for one of the most significant trades in years.
However, confirmation is needed, which is what today’s analysis is about.
I’ll share my exact trade plan for USDCAD, and an update on the US Dollar Index (DXY) reclaim we discussed on Tuesday.
Watch the video below and scroll down for the annotated charts and analysis.
On Tuesday, I discussed the possibility of a dollar index reclaim of 102.00.
The index closed above that mark on Tuesday, so a second daily close above would confirm a bullish dollar toward levels like 103.50 and possibly 104.20.
That has currency pairs like USDCAD looking increasingly appealing to start the new year.
At the end of 2023, I discussed how USDCAD had broken its 2021 trend line.
However, the as mentioned to VIP members recently, that break seemed too easy, given the significance of the level.
That’s fitting for the time of year, as end-of-year moves are often the result of institutions closing their books rather than conviction-driven moves.
But USDCAD bulls aren’t out of the woods yet.
They need to reclaim the 2021 trend line this week, as well as the 1.3380 key horizontal level.
A sustained break above both levels would confirm the late 2023 selloff as a fakeout and likely send USDCAD higher.
I’m only interested in dollar longs at the moment, given what we’ve seen so far from the dollar index and pairs like EURUSD and even GBPUSD.
That said, waiting for confirmation from USDCAD in the form of a reclaim of both 1.3330 and 1.3380 is essential.
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