Chart of the Week – USDCAD Short Setup Over 100 pips Potentials

USDCAD had a strong selloff of 3.83% in the month January 2019 with a bearish engulf candle pattern formed. Intermediate resistance level 1.3624 held where a renewed selling pressure began in January 2019. Moving Average Convergence and Divergence (MACD) on the monthly chart shows a curve towards the bearish zone as weakness in the bullish momentum is surfacing.

Support zone 1.3016/1.2830 serves as key areas to watch. Price action still trades above long term trendline

Source: tradingview USDCAD Monthly chart

In the daily chart below showed that price closed Friday 22th February 2019 is below the Moving Averages 100 and 200. A renewed selling pressure occurred when price throwback to test the Simple Moving Average (SMA) 100 at 1.3243 (now acting as a resistance level) with MACD crossing over to the bearish territory and MACD histogram below the 0 mark in the negative zone. Price currently trades slightly above the intermediate trendline.

Source: tradingview Daily chart

USDCAD is expected to show more weakness to the downside with a break below the intermediate trendline on the daily chart to confirm a further decline in the pair.

We expect more witness in the Dollar and Strength in Canadian Dollar towards 1.3047 which is 127.2% Fibonacci extension of the high – 1.3664 and low of 1.3179. A further below this level of likely see the pair’s price action decline toward confluence of Fibonacci extension zone 1.2906/1.2878

Trade Idea:
Position: Short at 1.3111
Stoploss: 1.3242
TP1: 1.3047
TP2: 1.2910

 

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About Adeshina Adetunji 14 Articles
Adeshina Adetunji, CFTe MSTA(UK) Managing Partner/Head Coach,Tredonomics Partners Limited. He is President, Traders, Investors & Analysts (TIA) MEETUP. Adeshina is a Certified Financial Technical Analysts (CFTe)

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