Potential USD/CAD Day Trade at Channel Support

I’m backing up with another USD/CAD post today because the live level that price is sitting at right now is too good to pass over.

After the BoC’s Wilkins hinted at hiking rates yesterday, the Canadian Dollar had a metaphorical rocket lit underneath it. This in turn saw USD/CAD drop down to the bottom of channel support that we had been watching on both the blog and tweeting developments intraday on the @VantageFX Twitter account.

Waking up in Asia today and as you can see on the following daily chart, price has tapped channel trend line support:

USD/CAD Daily:
Click on chart to see a larger view.

While it could be said that attempting to buy the pair in the midst of all this bearish momentum is akin to catching a falling knife, I think there is some merit in further exploring the idea.

Zoom out to a higher time frame again and you can see that we have a HUGE weekly bullish trend and this could be interpreted simply as price now just pulling back to a daily support level.

Now take a step back down again and zoom into an intraday chart. I’ve gone the 15 minute chart which shows us the following:

USD/CAD 15 Minute:
Click on chart to see a larger view.

What’s this? A pullback into previous short term resistance turned possible support?

If you’re going to catch a falling knife then this sure looks like a good one to catch! Just remember to manage your risk accordingly and the risk reward potential in this makes it all worth while.

Safe trading!

Dane Williams – @VantageFX

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Source: Vantage FX Blog