USDCAD Downtrend Continuation 1hr Chart

An opportunity to re-enter USDCAD short may present itself seven to twelve hours from now. I will be watching how price action develops over the coming hours with an expectation that price will touch the point labeled on the chart as 'retest'. This is a major area of confluence. It represents a retest of both the upper trend line of the ascending broadening wedge developing since yesterday's rapid fall in price, as well as a retest of the support that was broken during that fall. The intersection of these two lines is exactly the 0.382 Fib retrace of yesterday's 260 pip downward price movement.

This trade idea will be invalid if price action continues above the broken support.

Cautionary note: there is a lot of US data expected about 14 hours from now that will likely affect price action. CPI, Earnings, Retail, Industrial Production, etc.

This is not trading advice.

Comment:

Unfortunately this trade idea has now expired. Price action has not moved much in the last seven hours, although London will be opening shortly and we may begin to see more volatility then.

I'm still looking for a better short entry because I'm not convinced we have seen a healthy retrace of the CAD rate hike movement. Having said that, price action following the release of the US data seven hours from now will provide a better indication of price direction heading into the weekend.