I’ve written about the 1.3300-1.3400 support area on USDCAD a few times, including Tuesday’s blog post.
The pair hit a low of 1.3321 on Wednesday and has bounced 70 pips.
You can see how significant this trend line support is on the daily chart below.
We also have the March 2020 (COVID) trend line resistance at 1.3770.
It’s been a while since USDCAD tested that upper trend line, so we’ll see if bulls can secure a bottom this week.
One critical factor in confirming a swing low for USDCAD is a 4-hour and daily close above the April trend line.
You’ll recall this trend line from last week’s breakout trade setup.
That trade worked out beautifully, but USDCAD has fallen below the April trend line on a 4-hour closing basis.
If bulls can reclaim this level at 1.3380, we could have a long opportunity for a move back to 1.3650 and possibly the 1.3770 trend line.
Alternatively, a sustained break below 1.3330 would be bearish.
That said, I favor looking for longs on a 1.3380 reclaim, given that USDCAD is trading at multi-month range lows.
Until then, it’s a waiting game for me.
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