Wednesday, January 20, 2010

USDCAD—at resistance again

This pair is up nicely with my long from 1.0256 up 120 pips as I write. Clearly, risk aversion is in play and the USD is benefitting. As I suspected, the volatility yesterday morning took out my other long at +5 pips.

It’s about time this pair started to move after bunches of half-hearted starts. However, here we are again at resistance in a zone of 1.0395 to 1.0414/27. Additional resistance is at 1.0455. Support is at 1.0300 and 1.0315/20. Just as when prices climb or fall quickly, it’s hard to find good support and resistance, when pairs dither around for weeks on end, the entire area becomes support or resistance for future moves. This pair has been dithering since mid-October. Past readers will remember I made most of my money in this pair in October as it climbed. It’s still within the broad zone of 1.0208 to 1.0853 so it’s difficult to get too excited.

The pair is oversold on both the 3- and 1-hour charts. Both charts are also unremarkable at present. The one-hour shows a climb out of an upward channel recently with bullish candles. Here’s the one-hour chart:

© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.

My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.

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