New lower low in USDCAD marks a need for re-evaluation
After the large up move from A to B price has started to consolidate. Rather than find support at the lows at C, price has blown through those lows and the .382 retracement. Median line theory tells us that if price passes through one line of a median set, it will likely reach the other.
Since there seems to be no end in sight to the down move, since we are seeing nothing but bearish bars, we need to wait for evidence before we know what to do next. If we form some kind of consolidation sideways and stop printing red bar after red bar, we can think about getting long. The idea being that the lows at C had many stops that needed to be cleared out of the market before price could go higher. This is a classic wash and rinse type pattern.
If price does not consolidate or show some bullish bars, I don't see much of anything to do. If weakness continues all the way down to the lower median line around D, then looking for a small scalp from D to E might be possible, with the proper evidence and a small stop to provide a decent risk to reward. If that trade isn't viable, (bad stop or bad risk to reward...or no evidence of a reason to get long) then waiting to shot up near the old highs somewhere around the line at E would be the next opportunity.
Patience is key when things get sloppy. Let's see how things shake out before we get involved again.
Since there seems to be no end in sight to the down move, since we are seeing nothing but bearish bars, we need to wait for evidence before we know what to do next. If we form some kind of consolidation sideways and stop printing red bar after red bar, we can think about getting long. The idea being that the lows at C had many stops that needed to be cleared out of the market before price could go higher. This is a classic wash and rinse type pattern.
If price does not consolidate or show some bullish bars, I don't see much of anything to do. If weakness continues all the way down to the lower median line around D, then looking for a small scalp from D to E might be possible, with the proper evidence and a small stop to provide a decent risk to reward. If that trade isn't viable, (bad stop or bad risk to reward...or no evidence of a reason to get long) then waiting to shot up near the old highs somewhere around the line at E would be the next opportunity.
Patience is key when things get sloppy. Let's see how things shake out before we get involved again.
