Here we have a bullish
set up with the USDCAD
pair. Price has broken the neckline, burst north and created a higher high; we are now between the 1.168 and 2.24 extensions of the 5-0
within the right shoulder. A 50% retracement
accordingly from anywhere between these extension levels will create a new low and should provide a great long entry at support around the level of the neckline- provided price does not push past the 2.24 level. This analysis of the daily chart
provides generic price direction- I will be on the 4hr looking for an entry (a bullish
M wouldn't go a miss).
There seems to be a misconception with new traders that harmonic
movements work on their own without interpreting what's driving the market. Eg. If there's a bearish bat
on this pair, but the US have raised interest rates, I would not be shorting that bat. Keep an eye on the announcements and trade smart! When (if) price retraces to a 50% level, look for indications of a strengthening dollar/weakening cad.