USDCAD → Fell HARD to 135.000! Will We Bounce Here?
Updated
USDCAD fell out of the bull channel as predicted from last week's analysis and hit the profit target of 135.500. We are now sitting on the 200EMA with no sign of support, do we short?
How do we trade this? 🤔
We do not short! We're on potential support, the RSI is at 32.00, we haven't had a good pullback in 10 bars, best to wait on the sidelines. What we *should* be looking for is a bounce off of the 200EMA as previous price action has shown. With a strong bull signal and confirmation bar closing on or near their highs, it would be reasonable to long at this level.
💡 Trade Idea 💡
Long Entry: 1.35470
🟥 Stop Loss: 1.34655
✅ Take Profit: 1.37100
⚖️ Risk/Reward Ratio: 1:2
🔑 Key Takeaways 🔑
1. Breakout of Bull Channel, Bias to Short.
2. Target Short TP at 200EMA 1.35200 Achieved.
3. Look for a test of Daily 200EMA Support.
4. Long if Bull Signal and Confirmation Candle Close.
5. RSI at 32.00, below Moving Average, Supports short-term Short.
⚠️ Risk Warning! ⚠️
Past performance is not necessarily indicative of future results. You are solely responsible for your trades. Trade at your own risk!
Like 👍 and comment if you found this analysis useful!
How do we trade this? 🤔
We do not short! We're on potential support, the RSI is at 32.00, we haven't had a good pullback in 10 bars, best to wait on the sidelines. What we *should* be looking for is a bounce off of the 200EMA as previous price action has shown. With a strong bull signal and confirmation bar closing on or near their highs, it would be reasonable to long at this level.
💡 Trade Idea 💡
Long Entry: 1.35470
🟥 Stop Loss: 1.34655
✅ Take Profit: 1.37100
⚖️ Risk/Reward Ratio: 1:2
🔑 Key Takeaways 🔑
1. Breakout of Bull Channel, Bias to Short.
2. Target Short TP at 200EMA 1.35200 Achieved.
3. Look for a test of Daily 200EMA Support.
4. Long if Bull Signal and Confirmation Candle Close.
5. RSI at 32.00, below Moving Average, Supports short-term Short.
⚠️ Risk Warning! ⚠️
Past performance is not necessarily indicative of future results. You are solely responsible for your trades. Trade at your own risk!
Like 👍 and comment if you found this analysis useful!
Note
Watch the close on the current Daily candle! We need to close the candle on or near its high above the 200EMA to justify maintaining a bull bias. Keep in mind, we are also under the 30EMA on the 4HR and the Weekly; potential resistance zones. This candle would be our Daily bull signal, then we need to wait for a strong bull bar closing on or near its high to justify a long position. More updates to come as the chart unfolds!Note
USDCAD had a nice 4HR close near its high on the last bar at 09:00 EST. The current 4HR candle fell back to the 30EMA that the previous candle broke and we’re now testing support. We have the current candle and one more before the daily candle closes. If the daily candle closes on or near its high it’s reasonable to long to the bull channel support line.
Protective stop under the 200EMA, set the first target profit at 1:1 Risk/Reward taking half profits, swing the remainder until 1:3 Risk/Reward or until a bear reversal bar appears. More updates to come as they unfold!
Note
USDCAD bounced nicely on the Daily 200EMA is showing support on the 4HR 30EMA. We almost achieved 1:1 Risk/Reward, but came up just shy. We need to hang on tight and see if the price climbs a bit higher to the 1.36300 area to take that first half of our position out. Then see if we can break the 4HR 200EMA for the rest.
More updates to come as they unfold!
Note
Confirmation failed! We did not get a second bounce off of the Daily 200EMA and fell through. We now need to wait for a pullback on this second leg down to short for a third. Remember, the longer into a trend we go the lower the probability it will continue. So your position size should be smaller to accommodate for the increased risk.
A fresh USD/CAD analysis will be coming in the next couple of days!
-Joe Dean
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