USDCAD – looking for value to go short .. the week of 17 Feb

As per my analysis, we are seeing a weak USD across all major and minor currency pairs on the weekly and daily time frames. Which pair to trade will probably become clearer on Mon, but for now I am looking at USDCAD.

Yes, that huge spike up gap is confusing, but that gap was quickly filled. If I just ignore that gap, the picture becomes clearer; now I find that the price action this entire year was in a range between 1.4468 and 1.4280. This range narrowed considerably to the lower part of the range (see the yellow box) and this led to my bearish bias. On Thu last week, price actually broke down (below the range). It could attempt a pull back to the area I have marked in green. This area is significant, it has acted as support multiple times. I also see that the bearish candles have started becoming larger and I feel that the bears are taking control of this market. If price does pullback to my zone, we could have a good trade location.

Given the scenario I described, I would take a short position, with stop around 1.4350 and initial target at the support near 1.4180. If the downtrend continues with momentum, I will consider extending my trade to a secondary target near 1.3950.

This is not a trade recommendation, merely my own analysis. Trading carries a high level of risk, so only trade with money you can afford to lose and carefully manage your capital and risk. If you like my idea, please give a “boost” and follow me to get even more. Please comment and share your thoughts too!!

It’s not whether you are right or wrong, but how much money you make when you are right and how much you lose when you are wrong – George Soros