This is a trade idea that follows my previous USDCAD trade posted on February 18th that resulted in 150pips profit. We are now approaching a setup that will be able to do exactly the same!
So previously we saw a inverse head and shoulders pattern form on the supporting trendline to this pair's overall bullish trend (I have highlighted this in yellow). This pattern got broken to the upside as expected and moved all the way to the next Daily Key Level. Since then we have seen a reversal back down to retest both the support trendline AND the head and shoulders neckline. This is one of the market points that offers us an opportunity to enter a high probability trade, but the good news is the current market structure offers a couple of opportunities to profit. So this post will mean you are ready for any move USDCAD makes next.
Its quite possible that both of these setups will actually run into each other one after the other so we could be looking at a very profitable week!
Trade Setup 1 - Long Trade -
The first opportunity is that price will continue its slide down towards the point where the neckline from the head and shoulders pattern meets the supporting trendline. Its not possible to know exactly at which point price will hit these levels so the possibilities I can see are that it either hit the perfect point where both lines meet... this would provide significant confluence and a great opportunity to go long. OR price could descend down and hit the neckline first, have a small bounce and then hit the trendline before turning bullish to hit the next market Key Level around 1.33500.
Your SL should be below the trendline if you enter this trade and always wait for some candle stick confirmation.
Trade Setup 2 - Short Trade -
Because over the past few weeks USDCAD has been seeing some crazy moves its actually broken the market Key Level around 1.33500 both to the upside and then to the downside very quickly without offering any retest. This is unusual so its quite possible at this point the market takes a breather and turns up to test the key level first before moving down to test the trendline and neckline mentioned above. Note that we also have the blue descending trendline which could see a wick retest as well if the market Key Level doesn't hold or offer any resistance. Either way at this point I see the most likely option is that the market will then drop around 150 pips to the lower trendline or neckline.
SL should be above either the Key Level or the descending Trendline (depending on which one the market decides to retest) and always wait for some candle stick confirmation.
Follow this Trade Idea for updates where I will be keeping commentary and providing the points where I see the best entries etc.
So previously we saw a inverse head and shoulders pattern form on the supporting trendline to this pair's overall bullish trend (I have highlighted this in yellow). This pattern got broken to the upside as expected and moved all the way to the next Daily Key Level. Since then we have seen a reversal back down to retest both the support trendline AND the head and shoulders neckline. This is one of the market points that offers us an opportunity to enter a high probability trade, but the good news is the current market structure offers a couple of opportunities to profit. So this post will mean you are ready for any move USDCAD makes next.
Its quite possible that both of these setups will actually run into each other one after the other so we could be looking at a very profitable week!
Trade Setup 1 - Long Trade -
The first opportunity is that price will continue its slide down towards the point where the neckline from the head and shoulders pattern meets the supporting trendline. Its not possible to know exactly at which point price will hit these levels so the possibilities I can see are that it either hit the perfect point where both lines meet... this would provide significant confluence and a great opportunity to go long. OR price could descend down and hit the neckline first, have a small bounce and then hit the trendline before turning bullish to hit the next market Key Level around 1.33500.
Your SL should be below the trendline if you enter this trade and always wait for some candle stick confirmation.
Trade Setup 2 - Short Trade -
Because over the past few weeks USDCAD has been seeing some crazy moves its actually broken the market Key Level around 1.33500 both to the upside and then to the downside very quickly without offering any retest. This is unusual so its quite possible at this point the market takes a breather and turns up to test the key level first before moving down to test the trendline and neckline mentioned above. Note that we also have the blue descending trendline which could see a wick retest as well if the market Key Level doesn't hold or offer any resistance. Either way at this point I see the most likely option is that the market will then drop around 150 pips to the lower trendline or neckline.
SL should be above either the Key Level or the descending Trendline (depending on which one the market decides to retest) and always wait for some candle stick confirmation.
Follow this Trade Idea for updates where I will be keeping commentary and providing the points where I see the best entries etc.
Trade active:
Entered Short on this pair now after a retest of the key level zone as I suggested in the trade idea might happen. This has added confluence to the bearish picture of this market. you can see from the 1HR chart here that it has been printing Lower Highs and Lower Lows for quite some time - The perfect market structure for a bearish entry.
I am targeting the supporting trendline and hopefully the meeting point of the previously mentioned neckline and the trendline to offer a potential rejection of this zone and a long entry. It could take a little time for this trade to play out.
We have a speech by BoC tonight and then the US Consumer Sentiment Index at the start of the US session tomorrow so could easily see some significant price moves before the end of the week.
I am targeting the supporting trendline and hopefully the meeting point of the previously mentioned neckline and the trendline to offer a potential rejection of this zone and a long entry. It could take a little time for this trade to play out.
We have a speech by BoC tonight and then the US Consumer Sentiment Index at the start of the US session tomorrow so could easily see some significant price moves before the end of the week.
Comment:
Comment:
Be aware that there is a level of support that USDCAD needs to break to avoid a period of consolidation and range bound price action.
IF this does happen. I won't look to enter a long at the bounce off the dotted line because this offers some high risk. instead I will wait for price to come back up to the key level and if we get a rejection here, I will then enter a short with Target 1 at the dotted line & Target 2 at the supporting trend line.
IF this does happen. I won't look to enter a long at the bounce off the dotted line because this offers some high risk. instead I will wait for price to come back up to the key level and if we get a rejection here, I will then enter a short with Target 1 at the dotted line & Target 2 at the supporting trend line.
Comment:
Comment:
As highlighted, price wasn't able to break the most recent low and hence has set itself into a ranging chart pattern on the hourly chart. The overall bias remained short and just as predicted, there was a great short opportunity at the key daily level.
I anticipate that the low should be broken at some stage. Until then, we can see the two trading opportunities are either shortly at any other times price hits the red key level or the more risking approach of buying on the dotted line.
I anticipate that the low should be broken at some stage. Until then, we can see the two trading opportunities are either shortly at any other times price hits the red key level or the more risking approach of buying on the dotted line.
Comment:
Comment:
Price is now once again testing the minor support level of its recent range. Given the relative weakness of the Dollar Index its possible to see the break of this level shortly.
Any retest either later today could offer an opportunity to enter the trade.
I am still targeting the lower support trend line mentioned originally in the Trade Idea.
Any retest either later today could offer an opportunity to enter the trade.
I am still targeting the lower support trend line mentioned originally in the Trade Idea.
Comment:
