May 31 Chart of the Day - USD/CAD
Today we look into the Forex markets to check in on USD/CAD and notice that price is in familiar territory dating back to October 2022.
The zone between 1.357 and 1.365 has acted somewhat as a magnet with attempts to break away from that range in both directions but ultimately coming back and passing through it making 20 round trips during the last 8 months.
Price action technical analysts often refer to this type of an area on a chart as a change control zone. Meaning, that neither bears nor bulls are in control of the chart and that price can often respect its boundaries from above, from below, and often trade sideways within the zone for extended periods of time.
Most recently in the last week price made 3 round trips to ultimately go nowhere...
It's often said that a range will hold until it doesn't and truthfully there's a lot of merit in that for traders who understand this as they can trade it accordingly.
At the end of the day, many Forex charts seemingly are either trading sideways or running in one direction or another so if you're fortunate enough to be in a trade prior to the "run" then it simply becomes a practice of trade management via stop loss adjustments.
Of importance to note is that USD/CAD and Oil /CL often trade inversely... So when one chart is rising the other is often falling.
So what happens next?
Nobody knows for sure but using support/resistance, trend, Fibonacci, supply zones, and change control zones traders can develop actionable price levels of interest in both directions.
Take a look at the charts and let us know what you think.
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