USDCAD Buy Opportunity

Can The USDCAD Rebound This Week?

With 3 downward weeks in a row, and with last week showing a failry significant retracement, I think many traders will be looking at this pair closely.

USDCAD Buy Opportunity

USDCAD Buy Opportunity

 

The USDCAD pair is still looking extremely strong on the weekly charts as well as on the monthly charts, sharply up from September 2012 lows of 0.9633 which is around 4,200 pips from its current price of 1.3880 at the time of writing.

Currently, the pair is in a weekly uptrend as well as in a monthly uptrend. Additionally the pair is in a daily upswing and has just started a new H4 uptrend.

With the greater overall trends being historically bullish, if the pair gets any significant move upward now, we could see a run on the pair.

There is about 230 pips to the next key high and about 460 pips to the 2nd next key high, with about 800 pips in the total move.

The reward to risk ratil is strong with only about 100 pips needed for a reasonable stop loss. That means the reward is 8:1 if the ultimate key high on this chart is hit.

With the US dollar still arguably the strongest currency out of a basket of weak currencies, and the Candian currency experiencing long-term weakness with continued weak commodity prices, going long on the USDCAD pair seems like a reasonable trade to continue to benefit from, as long as the entry is inline with short-term momentum, riding with the overall greater trend.

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