Forex Swing Trading Signals - 12/16/2020
As we enter the FOMC today I have taken two Forex positions. In this short article I will discuss the USD/CAD long that I took yesterday at 1.2703
The Canadian Dollar may continue to push lower against its haven-associated counterparts, on the back of positive coronavirus vaccine developments and the Bank of Canada’s wait-and-see approach to monetary policy.
The BoC kept its monetary policy levers steady at its December meeting, after recalibrating its Quantitative Easing (QE) program to “shift purchases toward longer-term bonds” at the recent meeting. The central bank also opted to continue purchasing “at least $4.5 billion a week” of Canadian government bonds.
Although Covid-19 cases have surged locally, this may have a negative impact on the CAD.
The most important aspect of my long on the USD/CAD comes because of technical levels that have been hit.
Let's first start with the FIB levels on the weekly chart. In our Forex Trading Room, we use several methods to determine if a trade should be taken. Using fibs to determine certain spots of entry in our Forex Trading Analysis is one tool we use. Below you will see the weekly chart of the USDCAD, in this chart, you will see we hit the target of 1.61 fibs, this may also be a level that longs may look to enter their USDCAD long positions. Drawing a Fibonacci retracement is an easy way to see if a Forex pair is responding well to this method of technical analysis. I use Fibs when initiating a Forex Trading Signal and it is one of many tools I use to look at different Forex pairs.
Above you will see the entry that we took based upon the USDCAD hitting the 161, this is a common retracement in a pair that has an aggressive move, you will also see the 161 on a bullish move. If the 161 is hit this is not a guarantee in day trading or swing trading that you will see a move off of this level.
Lets have another look, this time at the monthly key levels on the Forex chart, you will see the monthly fib and the 38 fib hits it perfectly.
Another Fibonacci that we can look at is the monthly chart, you will see we had a perfect move to this level before the Forex pair began to move higher. We are long the USDCAD, we have more details available on this trade for our Forex Trading Room members.
- Posted by fx_Trader
- On December 16, 2020
- 0 Comments