By: John Ursus

Timeframe: W1

Recommendation: Short Position

Entry Zone: 1.0900 – 1.0975

Take Profit Zone: 1.0710 – 1.0760

Stop Loss Zone: 1.1050 – 1.1100

The USDCAD has rallied over the past 12 trading months. The rally took this currency pair from an intra-day low of 0.9632 to an intra-day high of 1.1278 from where it started to correct. This currency pair is now trading at resistance from its 38.2 Fibonacci Retracement and there could be an increase in volatility at this resistance level before the USDCAD is expected to decline to its 50.0 Fibonacci Retracement level.

Forex traders should split their order into several positions at resistance and slightly above in order to reduce risk for this trade. Any further rallies from current levels should be taken as a good opportunity to enter new short positions. Upside potential is currently rather limited while downside potential remains attractive.

USDCAD 82514

Related Articles
  1. Investing Basics

    5 Common Mistakes Young Investors Make

    Missteps are common whenever you’re learning something new. But in investing, missteps can have serious financial consequences.
  2. Fundamental Analysis

    5 Basic Financial Ratios And What They Reveal

    Understanding financial ratios can help investors pick strong stocks and build wealth. Here are five to know.
  3. Stock Analysis

    Hologic: An Activist Investment Analysis (HOLX)

    Read about a health care company that attracted activist investors Carl Icahn, Barry Rosenstein and Ralph Whitworth at the same time.
  4. Options & Futures

    4 Equity Derivatives And How They Work

    Equity derivatives offer retail investors opportunities to benefit from an underlying security without owning the security itself.
  5. Trading Strategies

    4 Common Active Trading Strategies

    Active trading entails buying and selling securities with the intent of profiting from short-term price movements.
  6. Stock Analysis

    Air Products and Chemicals: An Activist Investment Analysis (APD)

    Learn about the productive, and uncommonly friendly, activist investment made by Bill Ackman into Air Products and Chemicals.
  7. Investing News

    Market Outlook: No Bottom Until 2017?

    These investing pros are bearish on the market in 2016. Will there be a bottom in early 2017?
  8. Markets

    What Drives Oil Prices?

    Have you ever wondered why oil’s price fluctuates more than the value of other investments?
  9. Stock Analysis

    3 Obscure Twitter Accounts Making Money Off of You (TWTR)

    Learn how Twitter accounts that share quotes or information, such as @HistoryInPics and @Notebook, make money from their audiences.
  10. Chart Advisor

    ChartAdvisor for February 5, 2016

    Weekly technical summary of the major U.S. indexes.
RELATED FAQS
  1. What is arbitrage?

    Arbitrage is basically buying in one market and simultaneously selling in another, profiting from a temporary difference. ... Read Full Answer >>
  2. What is Fibonacci retracement, and where do the ratios that are used come from?

    Fibonacci retracement is a very popular tool among technical traders and is based on the key numbers identified by mathematician ... Read Full Answer >>
  3. What is a derivative?

    A derivative is a contract between two or more parties whose value is based on an agreed-upon underlying financial asset, ... Read Full Answer >>
  4. What is finance?

    "Finance" is a broad term that describes two related activities: the study of how money is managed and the actual process ... Read Full Answer >>
  5. What items are considered liquid assets?

    A liquid asset is cash on hand or an asset that can be readily converted to cash. An asset that can readily be converted ... Read Full Answer >>
  6. What is comparative advantage?

    Comparative advantage is an economic law that demonstrates the ways in which protectionism (mercantilism, at the time it ... Read Full Answer >>
COMPANIES IN THIS ARTICLE
Trading Center