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, we could see that this currency pair has been in an uptrend for quite some time. We go all the way back to the left-hand side of the chart, back in May of 2013. Started the uptrend on the left of this chart and continued to pressure higher, all the way up into 1.1234-level, which is the highest high – peak high – that we see up there at the top of the chart.
It’s actually just underneath there, but that red line happens to be a 50% retracement level from the Weekly Chart and that’s that 1.1234-level. So, definitely shying away from that as a resistance at the very top of the chart. Now, over the past four or five days, we have found support into this small, yellow-shaded area that you see all the way up here at the top of the chart. And you could see that up here. We’ll see that a little bit closer when we zoom in.
Now, of course we have to be aware that just about forty minutes from now the recording of this video. We do have some Canadian data – jobs data – coming out, so definitely something that could affect the market, especially this currency pair and US non-foreign payroll. So, both of those pieces of data, in about forty minutes from the recording of this video, could highly affect the value of this currency pair. Whether it goes back up in the direction of the previous uptrend or reverses and continues to pressure down for the USDCAD.
Let’s go ahead and zoom it in here on the Daily Chart. Taking a look, we could see that yellow-shaded area up here, over the past five days holding as support in an anticipation, likely, of that data. If it continues to hold support here, we’ll look for it to rally towards the highest high, back into the blue-shaded area, back into the 1.1200s. And of course a break above the recent highs, into the blue zone, and that red line at the very top, we’ll look for the continuation of the uptrend. Turning back lower, a break of the support, we’re likely challenging back down here to the purple-shaded area, where our next area of congestion and historical resistance was, back down here into the mid to upper-1.0900s.
So, let’s go ahead and outline a few things here. First off, Fibonacci from the low here at the yellow-shaded area. And I picked that because it was a period of long-term congestion and consolidation here. The low right here into the yellow-shaded area to the highest high. What’s interesting about that is the .236 fib is right here at the yellow-shaded area. So that’s very interesting. .236 fib is right at the yellow-shaded area. You could see. Just see the dashed line underneath or at the top of the yellow-shaded area. Then, the .382 Fibonacci retracement level of that same trend range sits right there into the purple-shaded area – 1.0969. Very interesting there.
Let’s go ahead and take this down to the 4-Hour Chart. And we can see here, on the 4-Hour Chart, that the market has been holding inside this yellow-shaded area as support for the past several days. Again, as long as it holds support there, we’ll look for the market to go back up. Let’s begin putting a couple of arrows here. So, again, holding within or above the yellow-shaded area, we look for the beginnings of a turn back in the direction of the overall long-term trend. Getting underneath it, open and close underneath it, which we haven’t done for the past many days. Open and close underneath 1.1045 or so. That’s the bottom of the yellow zone. We’ll likely look for the turn back down towards the purple-shaded area that sits down here, and that .382 Fibonacci retracement level that sits down into the 1.0969-level.
Again, right at the top of this yellow-shaded area you see the dashed line coming across the top of that yellow zone. That is the .236 fib of that previous uptrend leg that we looked at on the Daily Chart. Next resistance higher of course is this green-shaded area. And that green-shaded area has been holding as resistance for the past four days or so. Of course anything above that, we’ll likely look for a turn back higher.
Take a look at the bank flow levels over the past several days. The bank flow levels have settled right here into this pink-shaded area. Likely look at some resistance there into the bank flow levels. We don’t know where today’s levels will be, but we could see where they were the past four days. Likely looking at some resistance into there. Anything above that, we’ll likely look for a turn back into the blue-shaded area. And of course as I mentioned on the Daily Chart, any break above that blue zone, we’re looking for a continuation of the long-term uptrend.
So, we do have a couple of resistance levels prior to continuing the uptrend. Of course the green-shaded area, and above that we go to the pink zone. The pink zone will likely be resistance because we see the bank flow levels there for the past several days, but above that we go back to the blue zone. And of course above that we continue higher. The green, the pink, and the blue are our next three resistance levels, and a break above those we continue the uptrend. The yellow-shaded area of course is our current support. A break below there, we continue to pressure back down to the purple-shaded area. And as it touches down there, I would expect support.
So, no matter which way the market goes on news, we have anticipated support and resistance levels. Now, it doesn’t have to recognize any of them. The market could shoot right through the green zone and go to the pink zone, or it could shoot through both of them and go to the blue zone, or it may turn down and break under the yellow zone and go down to the purple zone. But however the market reacts to news, we know where the decision points will be. The decision points where the market historically has bought or sold, entered or exited the market. That’s what I’m trying to highlight here.
Historically, for the past four days, sellers have exited at the yellow zone and buyers have entered. Historically, for the past four days, the buyers have exited into the green zone and the sellers have entered. So, we’re recognizing historically where the buyers and sellers are jumping in and out of the market. And I don’t think that changes on news or data. I just think sometimes the market gets extended on news or data. So, it may extend all the way down to the purple zone at the bottom of the chart before finding support again. It may extend all the way up to the blue zone at the top of the chart before finding resistance again. But we know that each one of these levels has a high probability of finding support and resistance, no matter what the news or data does.
So, Fibonacci from the highest high down to the current low puts the .382 right at the green zone, the .618 at the pink zone, and the .786 and .886 up in the blue zone. So we could see Fibonacci overlapping in each one of those levels also. I think any move higher today on news, we’re likely to see resistance before the highest high, which is the blue zone, because the market will likely shy away from it like it did the last time. And only if it breaks above that blue zone at the top of the chart will we look for a continuation of the uptrend.
So, if the data causes it to shoot higher, watch for resistance in one of those upper levels. If it shoots lower, of course we know that the purple zone will be our next area for major support for the USDCAD today.
