USDCAD FALSE BREAKOUT REVERSAL BACK TO MONTHLY RANGE LOWSThis week I am looking to deploy capital depending on if the overall market outlooks becomes more favorable.
I have USDCAD on my watchlist as it has been struggling to break higher above 1.3600 for the past 3 months.
Recently, we've had a false breakout 3 times in the past month and each time bears stepped in and drove price back towards lows of 1.3500 creating a congested range.
Last week price attempted to go higher again and triggered buyers in but unfortunately that setup was invalidated and bull stops were hit.
A key indication of buyers getting weaker last week was that every new wave of the recent uptrend had less buyers preceding the major rejection on Friday 09/08.
I look to take shorts down to 1.3570 and see how it reacts around that support level and if strong selling continues I will take it down to range lows of 1.3500.
This is a potential +6R for this setup but due to the choppiness of recent price action this trade could also turn into a loss.
If my stops are hit, which is very tight, then I will be in cash and await better conditions to arise.
What I would look for if my stops are hit is a possible breakout back northbound, but I would need to see strong buying before deploying capital or we could experience more chop in which I will not be trading due to the continuation of poor market conditions.
