Let’s start March strong by looking at not one, but TWO dollar pairs. Check out what I’ve spotted on EUR/USD and USD/CAD!
EUR/USD just sported a long wick around 1.1150, which isn’t surprising since the area has been serving as support and resistance for EUR/USD since April last year.
Does yesterday’s wick herald a longer-term reversal for EUR/USD? Shorting at the first signs of bearish momentum would yield a decent reward-to-risk ratio especially if the pair drops back down to its February lows close to 1.0800.
If you think that a break above the 200 SMA on the daily time frame means that EUR/USD is ready for a longer-term uptrend, then you can also start placing your long trades above yesterday’s highs and build your position all the way to the 1.1225, 1.1275, or even the 1.1350 previous areas of interest.
Whichever bias you choose to trade, make sure you practice your best risk management moves!
USD/CAD bulls have taken a breather after the pair found support at the 1.3450 handle.
What makes the setup interesting today is that USD/CAD seems to be finding support at the 1.3325 handle that marks the 50% Fib retracement on the daily time frame. Not only that, but 1.3325 had also served as resistance for most of 2019!
Are we looking at a resistance-turned-support situation over here? Buying at current prices could still work especially if USD/CAD makes new 2020 highs in the next trading weeks.
If you believe that the “breakout” above 1.3325 is just a fakeout, however, then you can also wait until USD/CAD trades below the 1.3325 mark and aim for potential retests of the 1.3225 or the 1.3050 previous support levels.
Forex Chart Settings:
Slow Stochastic: 14,3,3
100 SMA: Blue line
200 SMA: Red line
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