The USD/CAD Trades to Range Resistance
- The USD/CAD continues to trade in a 127 pip range
- Sentiment is extreme with SSI reading -3.15
- Bullish breakouts begin over 1.3939
(Created using Marketscope 2.0 Charts)
Losing Money Trading Forex? This Might Be Why.
The USD/CAD concluded 2015 trading range bound, moving between key values of support and resistance. Now with the U.S. session opening shortly, prices are again trading under resistance at 1.3939. This point has been graphed above, and has been identified by extrapolating a horizontal line from both the December 23 and the December 29 highs. In the event that these range bound conditions continue, traders will look for prices to return towards price support. Support is currently found at a price 1.3812 and is denoted by the December 27, 2015 low.
It should be mentioned that ranges are concluded when price action breaks either above resistance or below support. Currently, SSI (Speculative Sentiment Index) for the USD/CAD reads at -3.15. With more positions short that long, traders using this as a contrarian indicator may look for a breakout above resistance. A daily close above 1.3939 would be considered significant as it may suggest that the USD/CAD is beginning to resume its long-term uptrend. In the event that prices fail to breakout, bullish traders may also wait for prices to return to support. This decline in price would again allow traders an opportunity to buy the market in a retracement scenario.
While there is little Canadian news set to open the first week of 2016 trading, there is U.S data that may have the potential to move US Dollar currency pairs. Analysts and traders alike are eagerly awaiting Wednesday’s Fed Minutes release, which is slated for 13:00 GMT. This event is expected to give some insight into the Federal Reserve’s December rate hike, and potentially provide direction for the US Dollar.
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