The broader trend for the Canadian dollar is down

Forexmentor.com Forex Trading Price Action

Canada is a net oil exporter. Crude is still down sharply this year. As such, the broader trend for the Canadian dollar is down. Matthew Strauss, currency strategist at RBC Capital Markets, forecasts that the loonie will retreat to the $1.18 level by the end of the first quarter and $1.21 by the end of the second quarter – pretty much in line with what I have been calling for.

Now, how to play recent price action. If you take a look at the 15 minute chart, you will notice that an uptrend continuation pattern appears to be in place, with MACD having already neutralized back down to the waterline. The safest way to guarantee that this pattern will play out properly is to place a buy stop at 1779, and let market action take you in, if there is enough gas left in the tank.

Yes, the over-all trend is still up, but we must play it safe with shorter-term entry points. Even if you get in too soon, the prudent thing to do is hold your position, knowing that momentum is on the plus side. The members area at www.forexmentor.com has lots of goodies waiting for you.

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