Want FULL ACCESS To
ROSS’ DAILY TRADE ROOM?
Simply Click The Get Started Button Right Now!
Transcript of Video
Click Here to receive an email alert when Ross posts a new daily video
I’m going to begin the day today on the US Dollar versus the Canadian Dollar [USDCAD]. Starting here on the Daily Chart, I’ve zoomed it way out so we can see further back in the past. And if you look at this blue trend line here, on this chart, we could see that the uptrend has been in place, going all the way back into September of 2012. Within that trend, we continue to see higher highs and higher lows, as it moves up in the direction of the uptrend.
In the most recent couple of months, we’ve seen a test of that blue trend line here. All the way back in mid-September, we saw the test of that blue trend line, a bounce back up, settled down as support into this pink and yellow-shaded area. Follow that pink and yellow-shaded area backwards in time; you can find, along that yellow-shaded area, historical support and resistance lined up in there. The pink-shaded area also. Historical support and resistance lined up in there. Going all the way back here into mid-2012, even on the far left-hand side of the chart, all the way back into January of 2012, we can see that pink-shaded area holding as support.
In the most recent couple of weeks, we saw the market dive down here into the yellow and pink-shaded area, giving us opportunities to buy it as it dipped towards the bullish trend line; to buy into those two levels of support, and now we’ve seen a continuation back higher towards the orange-shaded area at the top of the chart. So, let’s go ahead and zoom it in now that we have a recap of what’s been going on over the past few months. Again, there is that bounce into the pink-shaded area and the yellow-shaded area.
If you took buys down there, you should be protecting profit, as it continues to pressure higher towards the bearish trend line that sits at the top of the chart. Taking a red trend line here, I’ve connected the last two highs – the highest high up here. Going all the way back into July, the highest high all the way up here towards the 1.0600-level and connecting it with this high into the mid-1.0500-level. You can see that red trend line coming down and connecting very close now to where the current market is approaching this orange-shaded area as our next level of resistance.
Again, follow that orange-shaded area back in time. We could see historical supports back here. These supports also duplicating support that you see over here on the left-hand side. So, back in early July, we saw support in the orange-shaded area, then again here, in mid to late-August, we saw support here into the orange-shaded area, and as we know, historical support can help us identify future resistance. So, that is becoming now our next potential resistance target. And of course, the market is shying away from that a little bit right now, but that is our ultimate target for any buys that we might be looking at from down here into the 1.0300 or into the upper-1.0200s.
Also, taking Fibonacci from the previous high down to the current low. So, the highest high up here into the mid-1.0500s down to the low into the 1.0180-level puts the .786 Fibonacci retracement level right at 1.0484. That’s the bottom of that orange-shaded area. So, now we can see Fibonacci overlapping with historical supports from the past and now the red trend line coming down. So, this area here, highlighted in orange, is going to be a critical decision point. As long as we stay within or underneath that orange-shaded area, I expect we’re looking for this market to find resistance here and possibly even bounce back down for a period of time. Otherwise, a break above the red trend line and above the orange-shaded area looks for a continuation of the current trending price action.
Now, I expect it’s going to take some sort of news or catalyst – some sort of economic data – to push it through that historical resistance. It’s going to be fairly strong and the market is going to have a difficult time breaking through there. So I expect we’ll need some news to drive it through there, but in the meantime, I expect we’ll look for resistance there, potential bounces back down into support, giving us opportunities to, once again, add on to buys. Currently, the blue-shaded area that we see here on this chart is acting as our support.
Follow that blue-shaded area backwards in time. You could see resistance here, into early October. You could see resistance here, going back into August. Resistance going back into July. Support here in June. Even resistance all the way back in May. So, the blue-shaded area is also a critical decision point. As long as we stay above it, potential to bounce back up in the direction of the current trend and momentum. Breaking underneath that blue-shaded area, likely looking for a bounce back down. Incidentally, the bottom of that blue-shaded area happens to be the .618 Fibonacci retracement level of that same previous down trend.
All right, now that we’ve seen that from the Daily Chart, let’s move down to the 4-Hour Chart here for the USDCAD. And as we get down here to the 4-Hour Chart, again, there’s the blue-shaded area, which sits down here as our current area of support. As long as we stay within or above it, as we have over the past several days, potential for this market to find support and bounce back up towards the orange-shaded area. If, at any time, it breaks underneath this blue-shaded area, likely looking for a pullback all the way back down into the mid- to upper-1.0300s. The purple-shaded area becomes our next target under the blue-shaded area, but of course this is going to take a serious break underneath there before we would expect it to fall back down to the purple-shaded area.
Otherwise, support here. Bounces and rallies back towards the orange-shaded area or higher. We can see that yesterday’s bank flow levels sit well above the current market. We sit just above the orange-shaded area – the orange line of the bank flow levels sitting here just at the top of the orange-shaded area into the 1.0490s. We could see the top bank flow level yesterday sitting into the 1.0540-level. So, again, there’s potential. If today’s bank flow levels, or over the next couple of days, remain above the orange-shaded area or higher, we could still some room for this to continue to pressure back into the red trend line and the orange-shaded area.
So, this is our current intraday resistance. Within or under the orange zone, we could bounce back down, as we’re seeing the market shy away from it now. Really, my expectation is that until or unless it gets above that orange-shaded area, I think we’re looking for resistance. So, as it approaches this orange-shaded area, it does become a profit target for any buys that you might have taken, or a potential reversal – trend reversal. We’ll watch for clues to reversal. Candlestick formations, charting patterns, and price action that imply reversal. But the main areas to focus in on today are the blue and the orange-shaded area, as support and resistance, potential bounces off them for reversal – blue to go back up, orange to go back down – or a breakout above the orange zone continues to pressure higher; below the blue zone pushes back down for the USDCAD today.
