Video Analysis – USD/CAD January 19, 2015

You can see that the USD/CAD pair tried to break higher during the session on Friday, but struggled at the 1.20 handle, forming a shooting star. The shooting star of course is a negative sign, but quite frankly we have three hammers just before this, and we have seen that the 1.18 level is massive support. Because of that, I feel that this market will ultimately break out to the upside but it may take several attempts to do so. Looking at this chart, I believe that buying pullbacks will be the way to go going forward, especially considering that the market itself has been so strong over the longer term.

Ultimately, if we do break out above the 1.20 handle, I believe that it will be a little bit like a beach ball that’s been held underwater, meaning that we should shoot straight up. We will more than likely head to the 1.22 level next, and then possibly the 1.25 level after that. Remember though that the 1.20 level is a major number, so this won’t necessarily be the easiest of moves, but once it does breakout, it should be rather strong. I am looking at shorter-term charts in order to buy the pullbacks.