Anyway, the USDCAD just broke out of a longer-term downtrend on both the weekly and daily. It put in a reversal signal indicating a retrace back to the breakout level. After taking a short trade there at 1.33515 and exiting at the close on the 29th, I am looking for a signal to go long.
I will be looking for a signal on the daily to enter around the breakout level, which also acts as a . Once an opportunity to go long presents itself, I will look for a grouping of factors that support the trade. At the breakout level around 1.30864 we will have:
- An area of supply
- Market swing point ( )
- A test of the 28 day ... all moving averages would still be (this may change)
- In line with an event area, the breakout, but also on the 19th of March
- Trade is in direction of the current trend on the daily and weekly
I do use the and Full and at the moment they are not in extreme zones because we are simply looking for a retrace. However, before I take the trade I will be looking for a curl up or higher low on each.
In the meantime keep a pair like this on your watchlist, because it may have the potential of a 3 to 1 R/R. Maybe even greater if it rips through its most recent high.