Possible Trade on USDCAD next week

I was going through some of the daily charts in preparation for next week. One of the charts which caught my eye was the daily for USDCAD. After a good period of consolidation over the last week, it began to breakout on Friday. The first chart that is attached is the daily chart with the daily Murray levels. As you can see, 1.0254 was an important SR level. Below are the points which point to a bigger upmove.

1. 1.0254 is an important SR level and it was convincingly broken.
2. Double bottom
3. Breakout from the consolidation range

But a bit of caution is advised by the 4 Hr chart that is attached as well. This chart shows a bearish pin bar and this may be due to the fact that it was late on Friday and hence very low volume. So, we can either wait for the break of 1.0345 or we can wait for it to go down below 1.03 and try a long with very low SL. Do follow me on twitter (http://twitter.com/ns_karthik ) where i will post the trade if and when i enter it.

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  • Gmllk

    Thank you Karthik….will watch it….seems very interesting….looking at charts it really seems to respect those levels…..thx

  • its the same indicator….dont bother too much abt the differences,,,as long as the price respects these levels,pls take it as such….

  • i agree with the fundamentals that you point out….but coming to think of it, just cos the economy of a country is better than the other wouldnt mean that the currency pair would keep travelling in the same direction always !!

  • thanks !!

  • Dudley

    Hi Karthik, I am not a breakout trader, but if it does break above 10345, I would be looking for price to return before going long. However, I believe there is more supply between 1.0330 and 1.0350. So if it gaps up into that area over the weekend, then I am looking to short, with a small SL if I am wrong – down to 1.0130 (where there is a demand area)for around 220 pips. See twitpic chart. I have circled where I believe price will fall to by Tuesday.
    http://twitpic.com/2pqobr

  • Elie Haykal

    Very nice setup. I was planning to go long also but I’ll follow your analysis 😀

  • Gmllk

    Hi Karthik….found your thread on FF….very cool….are you using the same MM indicator that was provided in that thread or is there a better link for an updated version….also some else posted a version with alerts….if you put both sise by side on the same pair they dont match….any thoughts….thx

  • Mark

    This pair is in a 3 month range and appears to be moving back down to support in the 1.0140 area. If we look at the 4 hour chart we can see that the price is stalled at the 50 EMA. something it has done repeatedly before a drop in price. If we look at the $ index we see that the $ has broken down and is now consolidating suggesting a further drop. And on the fundamental side, the Canadian economy & banking system is in better shape than the USA. Looks down to me.

  • thanks for your comments. Lets watch this closely on Monday

  • thanks for your comments, Rose. I believe that USDCAD will rise and GU and EU should fall over the coming week. Just hope there is a bit more retracement in UCAD for me to latch on to the long…

  • Sct007

    Excellent post! This type of trade is about 85% of success. In addition price stall at 78,6 fibo from big upmove 1,0105-1,0671. If the price will continue up, 38,2 fibo retracement from downmove is exact 100EMA,(which is my 1st TP), 200EMA is exactly at 50%fibo (my 2nd TP). If we get there expecting rally up to 1.06-1,10. I am going long on monday open with SL at friday low cca 110pips). Thanks for posting this… About 4H chart… that candle looks really bearish, but for me it is only pullback on 38,2fib, and I am willing take that risk :). Happy trading to all.

  • JFRose

    Hello Karthik. The charts strongly suggest that you are right on target! Various weekend commentaries suggest there will be a strong rally Sunday, not waiting until Monday morning. The USDCAD H4 looks like a possible breakout, with due caution, as well as the daily chart. I would like to see you place some trend lines and fibs on these charts. Let’s watch this pair very closely. Any comments from this group?