USDCAD – Signs of Weakness

23 Apr - USDCAD Daily  Forex Chart

(Click on image for larger view)

Hi All,

Here’s a quick update on what I’m looking at. The above is the USDCAD Daily chart and price has recently testing a long term resistance level (~ 1.28). This level was last tested in early part of 2009. However, there was a clear Support-turn-Resistance pattern in Jan 2004 and May 2005 (not shown above).

Moving back to the chart above, price is showing me a few signs of weakness. The Head & Shoulder pattern is one of my favourite patterns. While this pattern is difficult to capture at the start, the confirmation came after the price broke below the range (purple box). Just to be clear, price broke out of the range with conviction (this is a key point that I’ve highlighted my book – see here) and I really like that.

Now, I’m looking for a potential retest of the bottom of the range. However, if the sellers are strong, price might not even test it and I’ll take a short trade when I find a suitable set up.

Thank you for reading and happy trading.

 

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