In this article, we will share top-down trading technical analysis for the USDCAD.
On the monthly USDCAD chart, we can see that the congestion price action between the 1.2270 level and the 1.3050 level. This is where we had monthly closes and opens in the last few months. This congestion will either continue or we will soon see a break above 1.3050 level. The pair seems to be at the support here for the upside continuation but only in the case of a strong daily close above the 1.3050-1.3100 zone.
The weekly USDCAD is revealing one more upside horizontal resistance 1.3120 level. So far we have a weekly Doji candle rejection at the falling trend line of the long-term congestion triangle 1.3050 level. Next week should decide about the upside break or downside reversal into the consolidation triangle again.
By using our top-down trading technical analysis we have identified the key levels which will be your triggers for trading entries in this heavy consolidation pair price action. Long trade entries with the high probability to be a winning trades should be taken only on a clear daily close above the 1.3120 level. Short trade entries should be triggered only on a break below the 1.2730 level. If you will be taking short trade entries here, at the market on this short-term congestion bearish price action, your SL should be above the 1.3050 level and your target should be 1.2730.
Happy trading! (click on the chart to enlarge it)
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