USDCAD—broke below 1.02

The evening star I blogged about yesterday did in fact give a good hint to the negative price action to follow with a drop to a low of 1.0160 this morning. Ostensibly this was because of "good Canadian employment news" but the clues were in the chart early yesterday. No matter why.

Often there's a reaction bounce after a sell-off like this but it would be best to use that as a short selling opportunity. 1.02 is now resistance for this pair although it could reach back up to 1.0208/1.0225.

Support is at 1.0100, 1.0084, 1.0072, 1.000, and gulp, .9823. Resistance is 1.02, 1.0208/25, and 1.0300.

Here's the three-hour chart. You can see how bullish divergence seems to have failed:




















© 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.