USD/CAD has been in a bullish trend for going on 4 years now. It was very overextended and based on the monthly chart, it has a lot of room to pull back. We finally got a pullback and then formed a bearish head and shoulder pattern on the daily chart. This confirms the higher time frames outlook and presents a great opportunity for a short trade possibly down to 1.33000 or even further down to 1.28000 area.
Just weary about the weekly chart though. I have a trend line in on the weekly connecting the higher highs, price has broken above the trend line and come back down and formed a low-test last week. Definitely an edge short on this pair though. so will look to take it as a day trade depending on the intradays :)
fx_technician
⋅
Yeah I see what you mean. Im more concerned with the monthly charts than anything. The low test on the weekly seems to be the formation of the right shoulder on the daily. There is a lot of resistance in the 1.39 - 1.40 area, so I would be surprised if price breaks above that. It definitely could and form a lower high to present another short entry opportunity. Im already short this pair, but the reward/risk is 10+/1 here and price could drop at any time so if I lose 1% here it will be well worth it.
Decleano
⋅
You have risked 1% to make 10% (10:1 trade?) Is that a hyper trade? But yeah that monthly high-test is HUGE like you said! Some good confluence for a short move so keeping an eye on it. Price is heading higher at the moment but still very early in the day yet... Unless we come back up to reject the resistance level and then make the move down only time will tell.
fx_technician
⋅
Yeah man, this pair is a definite hyper. Its been setting up for a long time and has a lot of potential. Not all hyper trades have that great of profit potential, but this pair has been way too overextended and the dollar is bearish now so it could collapse.
Decleano
⋅
A hyper aiming for 10% is awesome! Where did you enter in at? And I agree, especially with the US rate hike being less and less likely now as well.
fx_technician
⋅
Im got in at 6am gmt yesterday. Right after the close of the small high test rejection of 4hr 50ema. Had a nice drop last night and pulled back today during the US session.
Decleano
⋅
Yeah I see it. Just keep your stop well protected in case price wants to retest the key resistance level again before coming back down. A 10:1 R:R is brilliant though. Definitely worth the 1% risk and with the confluence for a move lower as well.
fx_technician
⋅
Yeah Ive got a lot of resistance in between price and my stop so we will see what it decides to do from here