USDCAD—finding a direction?

I can make a good case for both selling and buying this pair in the short-term which is normally a prescription to stay out until there's a clearer direction. There's been nothing but chop-chop since Friday, most of it with a negative bias. I have one long position on from 1.0444.

The pair seemed to hammer out a base of sorts overnight in the 1.0372 area. It has since gone on to make a higher low at 1.0382 so perhaps it's headed up again. If one looks at the three-hour chart, one can see a broadening pattern. The top of that pattern is at 1.0600 and there is some formidable resistance before it gets there. If it can get past 1.0530, it may have a shot. Once out of that, the uptrend should resume. There's bullish divergence on the chart. However, price action will tell the story.

Resistance

1.0530
1.0600
1.0636/44
1.0775

Support

1.0439
1.0372/82
1.0250
1.0225/08




















© 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.