By: John Ursus
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.