USDCAD—itty-bitty baby steps

If this pair is climbing it's sure baby stepping its way up there. It dropped to a low of 1.0398, almost hitting my stop. I still have both long positions at 1.0444 and 1.0462. As I wrote yesterday, if you're new at trading you want to stay away from this until it shows a solid close above 1.0602. So far today it has only reached 1.0530.

What's encouraging on the one-and three-hour charts is the bullish divergence with RSI. One could argue there's a confirmed double bottom at 1.0412. I don't buy that because price dropped below that point to the 1.0398 so it negates it. Even though I'm still "bullish" on this pair overall, I'm not going to start lying to myself by bolstering my arguments for being in it. However, as I've written many times, until it drops below the 1.0208 low, the pair seems to have found its bottom. There's a reasonable EW count that supports it going up. If it does go up there's a great risk to reward ratio. So far, my analysis has been rewarded (I made 1,000 pips on this pair alone last month after gains in it in October and November as well) so I'm sticking with it for now. Bottoming is a process. The fact that I'd like it to speed up is irrelevant to the market. Eventually, though, this pair will move. Current price at 9:27AM EST is 1.0498.

Support:

1.0466
1.0407/11/21
1.0398
1.0367
1.0312
1.0245
1.0208/25

Resistance

1.0500/06
1.0547/79/80
1.0593/1.0602
1.0636/44
1.0771/76/81

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.