USD/CAD Weekly Forex Signal - 8 December 2014

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By: John Ursus

Timeframe: W1

Recommendation: Short Position

Entry Zone: 1.1425 – 1.1500

Take Profit Zone: 1.0600 – 1.0700

Stop Loss Zone: 1.1700 – 1.1800

The USDCAD has rallied over the past twenty-eight trading months as weakness in the Canadian Dollar met strength in the US Dollar. The correction took this currency pair from an intra-day low of 0.9632 to an intra-day high of 1.1475 from where the USDCAD has started to lose its upward momentum. This currency pair may experience a sharp profit taking sell-off amid extreme overbought conditions.

The sharp rally took the USDCAD well above its Fibonacci Retracement Fan from where a pullback is expected. Last week’s candlestick formation formed an inverted hammer which may have marked the end of the uptrend. Forex traders are advised to spread their entries over a 75 pips range between 1.1425 and 1.1500. The upward potential appears to be rather limited while the downside potential remains very attractive.

USDCAD 12814

Professional trader and technical analyst with over one decade of experience. John believes that being a successful trader means you have to be in the minority and defy what is popular. Trading is an art form and not science and there are more myths about trading than there are successful traders.