Forex Strategy - USD/CAD Shorts Sought As Range Remains In Play
- USD/CAD Technical Strategy: Range trading preferred
- Range on the daily remains in force (1.0900 – 1.1200)
- Awaiting bearish reversal signal on four hour chart
As noted in yesterday’s candlesticks report; USD/CAD presented a range-trade setup following a test of the support level at 1.1050. With the range-top at 1.1160 acting to cap the pair’s advance, a bearish reversal signal on the four hour chart would open a new selling opportunity.
USD/CAD: Consolidation Continues
Daily Chart - Created Using FXCM Marketscope 2.0
The potential for an intraday bounce for USD/CAD was signaled by the Bullish Engulfing candlestick pattern pictured in the four hour chart below. The formation was made more noteworthy by its appearance near the 61.8% Fib Retracement level. With the bulls seemingly running out of steam, a bearish reversal candle would be taken as a new opportunity to enter short in order to keep playing the range.
USD/CAD: Range-Top Favors Shorts
4 Hour Chart - Created Using FXCM Marketscope 2.0
It should be noted that the upcoming FOMC March meeting offers substantial fundamental event risk for the US Dollar. The price action resulting from the decision may negate technical signals offered. Traders can watch live coverage of the event in the DailyFX Plus area of the site.
By David de Ferranti, Market Analyst, FXCM
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