USDCAD—rallying

USDCAD may have hit a bottom last week at 1.0061. I took a long position on Friday at 1.0115 and so far, so good. There's still a lot of sentiment against the USD vis-à-vis the Loonie but I'm stopped better than breakeven at this point. It did almost take me out before rallying because I had identified support at 1.0060 and my stop was just below that.

Friday showed what is known as a key day reversal bar. This is when the low was lower than the prior day's low but the close was higher than the prior day's close. In the case of USDCAD, the low on Friday was 1.0061 compared to Thursday's low of 1.0090 and Friday's close was 1.0173 compared to Thursday's close of 1.0163. While I found that encouraging, I had already bought at that point. My reasons for doing so were the strength of the nearby support and some patterns on the shorter time frame charts.

In any case, this pair is not out of the woods by any means. Support is at 1.0155, 1.0116, 1.0090, and 1.0071/61. Resistance is at 1.0186/89 (strong), 1.0232, 1.0322, and 1.0443.

Here's the hourly 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.