Previous long closed in profit. Potential for another long maybe

FX:USDCAD   U.S. Dollar / Canadian Dollar
182 0 1
Following on from our previous report (http://blog.icmarkets.com/tuesday-3rd-november-daily-technical-outlook-and-review/), we mentioned that we were targeting mid-level resistance 1.3150 as our second take-profit area from the long we took on Friday at 1.3059. As you can see, price hit this area yesterday and we proceeded to close a further 30% of our position. Following this, however, the floor was removed from this market and price dropped like a rock, surpassing psychological support 1.3100 and driving deep into demand drawn from 1.3038-1.3082, consequently closing the remaining 20% of our position at breakeven.

‘As one door closes another one opens’ as they say. Notice that price has chalked up another AB=CD bull pattern that bottoms out just below the above said demand at 1.3029. This – coupled with the converging daily swap (demand) zone seen at 1.3074-1.3025 and the 50.0% Fibonacci support at 1.3055 could be enough to bounce price into profit.

The only drawback to this trade is the weekly timeframe shows room for price to continue lower from supply at 1.3456-1.3277 down to the swap support at 1.2833. Therefore, for us to be confident risking capital here, we’d need to see lower timeframe support hold firm, thus confirming bullish strength exists.

Levels to watch/ live orders:

• Buys: 1.3038-1.3082 Tentative – confirmation required (Stop loss: dependent on where one confirms this area as a fake lower could be seen here).
• Sells: Flat (stop loss: N/A).

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