Today is Thu, August 24, 2017 8:52:22 GMT
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Currencies CAD Using Support And Resistance To Find Trades!

Most of the time the chart of the day is a discussion of a particular currency or pair and gives a longer-term outlook for where prices may be going.  Today I am throwing a bone to the short-term traders by including this “teachable moment”.  Not to mention that today is a range-bound, low volume day ahead of the holidays so no longer term trends are emerging.

So here is a quick way you can find trades, especially on range-bound trading days, though this technique can also be used on longer-term trades.  Essentially the idea is a simple one:  that areas that were previously support now become resistance once they break down.  The opposite can also hold true, that previous resistance can become support.

However, in this chart we can see that USD/CAD has been moving lower (see last week’s prediction and longer-term trade that nearly top-ticked this pair!) and a retracement brought the price today back up to levels that had previously acted as support at 1.02.

As you can see, that resistance held and made for a low risk opportunity to get short ahead of the resistance and in line with the intermediate term trend.  This allows short-term traders to get in and out quickly with a low degree of risk.  Now of course, should the price close above the 1.02 resistance, then it could become support!

These types of short-term trades are a pip-collectors dream, as they can do this all day long!  So consider this my gift to you!  Happy Holidays to All!