What you know as a trader is an advantage. For the USDCAD what I know is that this week, there has been willing buyers at the 1.4000 area (up to 1.4007). Lows on Monday, Tuesday and again today has come in against that level/area.
Knowing that allows traders to define a bias (above and the buyers are in play), risk (if the price goes below the bias shifts. That is the risk). Traders can then look for targets on where the price may be going as long as the risk level is not triggered.
So with the 1.4000 level as risk, what are the targets?
The first is to get and stay above the 50% retracement at 1.40135. The price is currently just above that level, giving the buyers some added confidence.
The next key target would be near the high from yesterday. That is also near the broken 38.2% retracement of the move up from the end of October low. The falling 100 hour moving averages also moving toward that retracement level near 1.40433. That becomes next target that buyers can aspire toward as long as the risk level is not taken out.
Buyers continued to make a play.
This article was written by Greg Michalowski at investinglive.com.