This is a great example of how resistance often becomes support (and vice versa) with multiple tests of both. It is always worth extending trendlines beyond current price action. It is very common to see a break through support or resistance come back and retest the same trendline from the other side.
Whenever you are looking at a technical level, always ask yourself the following:
- Am I buying at a potential bargain/wholesale/discount price? (supply or demand zones)
- Why is there more likely to be more supply/demand orders at that area? (new traders entering/traders taking profit)
- What are the underlying fundamental/sentiment drivers that...
I'm joking of course. :)) But seriously, have a look at this indicator I'm showing. As I mention in the video it's not all about indicators. It is also about selecting the right indicator for the instrument one is trading.
Practice and understanding of how you can work them together to estimate probabilities is most important.
On a monthly chart, USDCAD looks like it doesn't really want to go anywhere. It is currently weaker but a bit of upside to the trade zone would be best for risk to reward before committing to a short position.
Last week we saw a double bottom created on USDCAD 4 hour, with a decent outcome of the NFP last Friday it sent the Dollar flying against CAD. Clearly showing the double bottom pattern would have been perfect to buy once completed.