Thursday January 28, 2010 - 15:29:47 GMT
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FXTimes: Daily Technical Update USD/CAD Stalking Possible Reversal Setup
Daily Technical Update
January 28, 2010
(USD/CAD) Stalking Possible Reversal Setup
- Daily and 4H: The USD/CAD broke below its rising trendline but this correction from the rally looks to be short-lived. (Refer to Daily Video Technical Update ; 2nd pair). The key is to stalk the current bounce from 1.0550, better seen in 4H time-frame.
- The daily candlestick shows possible reversal signal if the market closes lower.
- If the market closes above 1.0690, the rally continues. However, if
the market is able to close below at one of the retracement levels (see
1H chart), then there may still be a further decline to the 38.2% or even 50% level (1.05 and 1.045 respectively).
- Looking at the daily, there is a reversal signal if the market
closes below the low of the previous candle. This would basically
require a close below 1.06.
- 1H: The bearish outlook even in the short term
will be difficult to materialize during such a strong uptrend. But if
the market does show weakness in the current US session, and if the
pair doesnâ€™t take off neither in the Asian session, the correction
decline would be likely.
- A quick assessment of risk using 3ATR and reward using 1.0450 target yields about 130:90 or 1.44:1.
However, if you are strong on this short-term bearishness, which could
just be a correction, be ready to switch right back into bullish mode
if the decline weakens.
Commodity Trading Advisor
Information and opinions contained in this report are for
educational purposes only and do not constitute an investment advice.
While the information contained herein was obtained from sources
believed to be reliable, author does not guarantee its accuracy or
completeness. CMS will not accept liability for any loss of profit or
damage which may arise directly, indirectly or consequently from use of
or reliance on the trading set-ups or any accompanying chart analyses.
Foreign currency trading is not conducted on an exchange. CMS is
acting as a counterparty to its clientsâ€™ transactions and as a result,
CMSâ€™ interests may be in conflict with its clients. Since CMS acts as
the buyer or seller in the transaction one should carefully evaluate
any trade recommendation provided by CMS or any of its solicitors.
Foreign currency trading involves a substantial risk of loss and may
not be suitable for all investors.
All screenshots are made from VT Trader 2.0 and are of actual market data at the time of the screenshot.
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