I'm still long from 1.0472 but of course if the decline continues my profit stop will be hit.
Yesterday made for two days in a row that the pair failed to break 1.0668. The long upper shadows on each of the daily candles was ominous as this hints that higher prices are being rejected.
History shows this is a significant price for USDCAD. If you look at the arrows and the line I've placed on the weekly chart below you see that this little price zone has acted as both resistance and support (polarity). If it breaks upward then there is additional resistance up to 1.0856 although there's significant upward potential given the triangle I've been blogging about and which you can also see outlined on the weekly chart.
As of now, even though its dropping, the pair is still above that triangle. It's still above the 10, 20, 50, 100 and 200 day moving averages. The low so far is 1.0544, just below Fib confluence of 1.0586. This is lower than yesterday and the day before. Below 1.0540 looms 1.0480 (the breakout point), 1.0450, and 1.0389/50. Resistance is at 1.0668, 1.0700 and 1.0856.
Here's the weekly chart. My trade doesn't show because I use a different charting package for weekly and monthly charting.
© 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.