In this article, we want to give you a “heads up” on USDCAD.
The pair is bouncing off the strong uptrend support confluence 1.2900-1.2950 zone. The pair formed a continuation wedge and is bouncing from its rising line. This rising line is also a retest of the broken long-term falling trend line. A perfect confluence of the support.
We are seeing the bullish shadow candle formation showing on the daily chart but we need to wait for a daily close to confirm this. This price action is giving to all traders a good long trade entry opportunity, as long as the pair is holding above the 100 SMA (BLUE LINE) 1.2960 level.
In this kind of situations, waiting is not a good option. Traders should wait for a late NY session to enter the long trade. The risk by placing a stop loss below 1.2950 level is almost 100 pips but the possible reward could be much greater even more than 200 pips where the first resistance lies. A clear daily close above the 1.3200 level would lead to a continuation higher into the 1.3500.
By using our top-down trading technical analysis we have identified the key levels which will be triggers for the entry and exit, based on the present market conditions of the instrument.
Happy trading! (click on the chart to enlarge it)
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