Has USD/CAD hit the bottom?
USD/CAD has been in a severe downtrend over the last months, it has now reached a significant area of interest, namely the 50% retracement level from the bullish move that occurred between 2011 and 2016.
On the weekly TF, price has printed a doji candle confirming the market is undecided as to it’s next move. We have opened this week’s candle with price trading above the mid-line of the doji candle.
On the daily TF, the downtrend has showed signs of slowing in conjunction with divergence on the RSI confirming a weakening trend. An inverted hammer candle also presented at the end of last week.
On the 4h TF, price appears to have entered a range. It is normal for markets to move from Trending to Ranging to Trending etc. On the lower TF we can also see a wedge developing as price prepares to make its next move.
We therefore have the possibility of a significant counter trend move to develop following such a significant drop after the ‘Corona’ high.
We enter long with a tight stop loss below the recent low. Risk / Reward on the set-up is 15:1
On the weekly TF, price has printed a doji candle confirming the market is undecided as to it’s next move. We have opened this week’s candle with price trading above the mid-line of the doji candle.
On the daily TF, the downtrend has showed signs of slowing in conjunction with divergence on the RSI confirming a weakening trend. An inverted hammer candle also presented at the end of last week.
On the 4h TF, price appears to have entered a range. It is normal for markets to move from Trending to Ranging to Trending etc. On the lower TF we can also see a wedge developing as price prepares to make its next move.
We therefore have the possibility of a significant counter trend move to develop following such a significant drop after the ‘Corona’ high.
We enter long with a tight stop loss below the recent low. Risk / Reward on the set-up is 15:1
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