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Ideal trades always occur when you have several indicators lining up at the same time. As we all know indicators are typically ineffective when used in isolation - the combination of several analysis techniques is usually more robust.
Case in point, USD/CAD. First, for those not aware, USD/CAD is positively correlated with the Dollar Index (DXC) - i.e. if DXC is trading lower, it is highly likely that USD/CAD is too. The opposite is true for EUR/USD.
That being said, the chart below suggests that on a short-term basis, DXC has out in a low and will likely move higher.
In addition, our short-term reversal levels (STRL's) at 86.50 & 86.44 also suggest that short-term bottom is in place.
USD/CAD has almost an identical pattern.
Keep an eye on the 1.1330 level, it should offer a decent long entry point.
As always, feel free to send me your comments and questions.
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Dave Floyd is a professional FX and stock trader based in Bend, OR and the President of Aspen Trading Group. Dave's approach to FX combines technical and fundamental analysis that results in trades that fall into the swing trading time frame of several hours to several days. For a free trial to Dave Floyd's Daily Forex Alerts click here or call 888.484.8220 ext. 1.
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