FOREX chart - USD/CAD

[FibMaster]

This is a daily chart of USD/CAD, This chart is for intra-day trading, but shows the context from a daily chart. (See attached chart).

First the long-term context...
We all know that CAD has made a HUUGE down-move for the past 6 years. The recent bottom of that down-move was in Novemebr 2007. Since then we have had a decent rally topping out in December. After that we have made a significant retracement and then a rally at the end of December and early January.

Now, the current picture..

The rally since late December is bringing CAD back up to the significant resistance level near 1.02 (see the top of mid December). If CAD can push above the 102 level, it is in bullish zone, which gives us long opportunities. So above the Dec swing high, we can buy dips intraday, and take profits on Rallies. Of course we do this using Fibonacci Retracements and Expansions/Extensions.

What if the chart reverses, crosses down? If the resistance area holds, and the market turns down before 1.02 or in that area, we can trade short. In this scenario, we would drop to lower time-frames, and short rallies intra-day, taking profits on the dips. In this bearish mode, there is support at .98 .95 and also .905 near the swing low of November. So use those support levels as profit-taking possibilities when shorting.

Over the next weeks, I'll be here in the TraderZine FOREX forum answering questions for you. Feel free to post your own trades, your own setups, and also any questions that you may have for me.

Best wishes for 2008, I hope your trading is profitable all year!

-Neal.

[johntsai]

Did you post the right chart?

Looks like the GOLD chart.

[FibMaster]

Did you post the right chart?

Looks like the GOLD chart.

Right! Thanks for letting me know. The correct chart has been posted now.

[r-factor]

Hi Fibmaster,

Just was looking at the CAD chart and am having difficulty properly assessing whats going on. I have attached the Daily and Four hour chart. On the daily I have marked the SK support in red from the recent up move. On the four hour chart I have marked the SK resistance from the recent down move.

The fact the two charts are giving mixed trends, one up and one down, I am having difficulty understanding where to enter and how to enter (long or short). As I understand, the safest short would be once the price has breached the Daily SK support. However, I may also choose to enter on the four hour SK resistance (if it tests and resists). Am I correct on this point? Which option would be the best? Also, I suspect that a sideways action might be beginning as with many of the USD pairs.

If the up move continues, it should would have to break the 4 hour sk resistance. If the down move continues, than we can have a target of .95 area (1.618 xpansion on the daily chart).

Please do advice on the points raised above. Thanks

:)

[Lifesong]

Herewith my daily view of CAD:

Daily price action supported at SK level of 0.9870 and rallied to 1.0126 (see my daily chart attached). The daily trendline remains intact for going north (up) and for today I'll be long, based on the 4H price action.

The swings on the 4H chart have been higher since the bounce of daily SK and I also see SK support at 1.0046 to 1.0051 for a new long position. For this trade I'll have a SL below 1.0000 and my profit target is initially 1.0180, but longer term aiming to exceed previous swing high (1.0377).

Any comments or suggestions and please take note that I'm a swing trader - sticking to a trade for a few days or even a week or two?

[Lifesong]

Herewith my daily view of CAD:

Daily price action supported at SK level of 0.9870 and rallied to 1.0126 (see my daily chart attached). The daily trendline remains intact for going north (up) and for today I'll be long, based on the 4H price action.

The swings on the 4H chart have been higher since the bounce of daily SK and I also see SK support at 1.0046 to 1.0051 for a new long position (see attached 4H chart).

My trade for today is long at 1.0040-50 with a SL below 1.0000 and my profit target is initially 1.0180, but longer term aiming to exceed previous swing high (1.0377).

Any comments or suggestions and please take note that I'm a swing trader - sticking to a trade for a few days or even a week or two?

[FibMaster]

Hi Fibmaster,

Just was looking at the CAD chart and am having difficulty properly assessing whats going on. I have attached the Daily and Four hour chart. On the daily I have marked the SK support in red from the recent up move. On the four hour chart I have marked the SK resistance from the recent down move.

The fact the two charts are giving mixed trends, one up and one down, I am having difficulty understanding where to enter and how to enter (long or short). As I understand, the safest short would be once the price has breached the Daily SK support. However, I may also choose to enter on the four hour SK resistance (if it tests and resists). Am I correct on this point? Which option would be the best? Also, I suspect that a sideways action might be beginning as with many of the USD pairs.

If the up move continues, it should would have to break the 4 hour sk resistance. If the down move continues, than we can have a target of .95 area (1.618 xpansion on the daily chart).

Please do advice on the points raised above. Thanks

:)

The CAD chart has entered a period of consolidation, so is not great for trading right now. There is a lot of whipsaw, if you need that for your trading-plan lol. So that accounts for your contradictory trend issue.

In such a case, I agree that is needs to break either the support or resistance before trading, for the best opportunities. Better to stand aside and let the market pick a direction.

-Neal.

[FibMaster]

Herewith my daily view of CAD:

Daily price action supported at SK level of 0.9870 and rallied to 1.0126 (see my daily chart attached). The daily trendline remains intact for going north (up) and for today I'll be long, based on the 4H price action.

The swings on the 4H chart have been higher since the bounce of daily SK and I also see SK support at 1.0046 to 1.0051 for a new long position (see attached 4H chart).

My trade for today is long at 1.0040-50 with a SL below 1.0000 and my profit target is initially 1.0180, but longer term aiming to exceed previous swing high (1.0377).

Any comments or suggestions and please take note that I'm a swing trader - sticking to a trade for a few days or even a week or two?

Unfortunately the rally didn't have any steam, so the overhead resistance capped the chart. At this point the chart could go anywhere. I wish it would pick a direction!

-Neal.

[r-factor]

Although I dont trade the CAD A0-FX chart, I was looking at it and it maybe setting up for some real short term/day trades.

On the attached chart, which you can find on: http://r-factor-chartsandlikes.blogspot.com/
Anyways, as we can see from the daily chart the price action is range trading. The black line on the chart is the weekly resistance. The daily trend is up on the TRSI or shall I say it is just crossing and maybe will be confirmed on monday. The red line on the Daily signifies a SK support. It should be noted that the same support has been held 3 previous occasions.

Now turning to the four hour chart, we can see the recent strong down move from that weekly resistance to the daily support. The price breached the daily support and has broken the aggressive trendline. The yellow line on the chart signifies the 4 hour SK resistance and is testing it at the moment.

Now onto the potential trade, I am looking for intraday longs to the weekly resistance line if price can penatrate the 4 hour resistance and price action confirms the same. At the same time, I would be a little carful as the SRSI is reaching the 40 level, signifying the resistance. However, if the price can be penatrated, going long would be a possibility.

On the downside, I would look to enter short if the resistance holds and price falls back and the TRSI on the 4 hour confirms as thats my trend indicator.

However, I would be cautious to enter short before the 30 Min Support is broken and possibly the 30 min trendline is broken. Off course, if I feel more aggressive I can enter at the break of the support, but I would rather wait.

Please feel free to comment on my trade set-up.

[FibMaster]

.99 is the line to cross for the bulls. Above that, intraday longs are an attractive possibility. Daily trend is not up yet, so we have to be careful. A move down is still quite likely while that trend remains down.