USDCAD: Intraday High Near 1.1962 Brings Pair Closer Towards Possible Resistance Under 1.2000 Level
The daily candle chart below shows the price history of United States Dollar (USD) against the Canadian Dollar (CAD). This currency pair is known as USDCAD, and is trading near 1.1956 around time of publication today.
Last time this pair was reviewed in Ideas You Can Trade was in December when 1.1700 was approaching. Since then, higher-highs followed as USDCAD broke-out above the widening bullish channel (point 4 on chart below) which has been the focal point of the trend in recent months. Around the holiday period the pair dipped back into that bullish channel and then started off the new year very strongly - breaking above the channel again - and now barely under 1.2000.
In addition, the breakout above the prior bullish channel has revealed a new steep bullish trend line (point 7 on the chart below), which points higher (i.e. more bullish or steeper). Traders with a bullish outlook may look to take profit near 1.20 or buy above that level if a breakout follows higher, whereas traders with a bearish view on the pair may look to enter if 1.20 cannot be overcome, or if a pullback occurs sooner (from current levels).
Below are examples of how to trade a bullish continuation or a bearish reversal:
1. BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ 1.1970 with a Limit to take profit @ 1.1999 and a stop-loss @ 1.1951 Risk/Reward Summary: Limit risk = +29 pips profit / (-19) Stop-loss risk = Gain to Loss ratio = 1.52
2. BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ 1.1880 with a Limit to take profit @ 1.1833 and a stop-loss @ 1.1919 Risk/Reward Summary: Limit risk = +47 pips profit / (-39) Stop-loss risk = Gain to Loss Ratio = 1.20
Medium term daily candle: