USDCAD and the battle of the big figures

Traders have the loonie locked in a 200 pip range. Which side will win?

There's something to be said for summer trading. The bigger levels tend to hold more often and that allows us to trade with reduced risk.

USDCAD is one such pair. It's locked between 1.3000 and 1.3200 and is moving fairly swiftly between the two levels meaning that you don't have to wait too long to trade either side.

USDCAD daily chart

We've always got to be careful the more times a pair hits a support or resistance level. We've just seen that same action in AUDUSD. However risk can be kept quite low on trading longs from 1.3000.

When I trade big figures or strong levels I always look to get in just ahead of the actual level. In this case I'd be looking to buy in around 1.3010 or 1.3005 if I wanted to squeeze as much as I could. I'd keep a stop fairly tight under the support line and the 55 dma. If I wanted to give it a big more room then I'd place my stop under the 100 dma at 1.2949.

For shorting off the 1.3200 level I'd start around 1.3190 with a stop above 1.3220/30. Again if I wanted to go a bit further I'd park it above the July highs. In this instance I'd probably stick to the tighter stop strategy, just because we've been hitting these levels a lot recently. If I went wider I'd go in with a lower trade amount and maybe add a bit more at the first sup/res points, thus spreading the trade out a bit.