USDCAD Short Opportunity - 4hr & End to Daily Correction? USDCAD is looking to approach another sell area in its daily corrective move we have all been following so intently. There have been many setups on offer during this period and this short setup is by no means any different. Nevertheless I will touch on why, further down in this piece, this correction may be coming to an end!
If price doesn't move into no mans land but respects it, then it should breakout of this horizontal triangle - patience is important here. To trade this setup, obviously confirmation through your strategy should be your main priority before entering.
In my opinion the green line below no mans land (the top trend line of the daily corrective move) will provide us with the best entry locations for shorting this pair.
On the daily chart depending on how you look at the last 5 or so months, one may come to the conclusion that we are currently trading the C wave of a corrective structure that has followed an earlier impulsive move down through waves 1,2,3,4 and 5 (we can possibly say we are even riding the E wave as the structure is in a sort of horizontal triangle to which would also support this argument). If this is in fact the case we will likely see a continuation of the downtrend seen prior to the corrective structure, which means a price movement much larger than we have seen over the last few months - therefore meaning a potentially fantastic opportunity to get short and hold out for as long as you have the nerve.
Of course markets move where they want when they want so we could simply see a continuation of the current uptrend. However if we see a break of the trend line of the entire corrective structure at the bottom of the chart, you can better your bottom dollar I will be shorting some more as it will be an indication market bulls are leaving.
