The USD/CAD pair was seen trying to recover from the slump after the Fed's rate hike was confirmed.
Hi fellow traders! USD/CAD recorded a gain at the closing of Friday's trading day (18/November). The Greenback is trying to bounce back from the slump after the Fed reaffirmed its commitment to raise interest rates in the near future. At the time of writing this analysis, USD/CAD's bull looks stable. Therefore, long opportunities will be the main scenario for this trading analysis.
Analysis and Recommendation
Let's take a look at the following USD/CAD H4 chart below:
Based on the H4 chart above, it has been pointed out that USD/CAD is trying to continue rallying toward the Supply zone around 1.3505–1.3575. On the downside, there is a demand zone of 1.341 – 1.335 which is always waiting as an initial stop in case of a minor correction. That way, watch for the opportunity to buy on dips when the price starts to correct to test the demand zone.
Be aware if the correction continues breaking the 1.335 level since the penetration above this area will push the price down to continue the correction to the demand zone 1.3252–1.3165 or lower.
- Therefore, set a long position at 1.341 when the price manages to enter the demand zone and there is a bullish signal confirming it. Stop loss may be positioned at 1.335, while the profit target on 1.3575.
- Alternatively, set a short position at 1.335 when there is a significant breakout signal confirming it. Stop loss may be positioned at 1.341, while the profit target on 1.3252.
Keep in mind to always use risk and money management before trading! In addition, to make use of trailing stops, don't forget to exit the market as soon as you find a reversal signal!
USD/CAD key levels:
- Resistance: 1.3575, 1.3505
- Support: 1.3410, 1.3350, 1.3252, 1.3165