USD/CAD is currently stuck in a 120 pip range (on the H4 time frame), and has been for the last month.
Seasonality would suggested that the USD should weaken (leading to a drop in USD/CAD ) in late July/early August, and begin a bearish period until October. However, we're currently seeing a strong bullish divergence momentum phase. This is significant as we can identify two fairly recent ranges that broke higher (February & April 2019) on bullish divergence .
The bottom line is that we have contradictory signals, which means that a prudent trader should stay on the sidelines until a clear breakout develops.
I've identified two target levels for both longs and shorts, depending on how the range breakout occurs. But I won't be entering a trade until a clear, and strong, break of the range boundaries occurs.
Let me know if you have any queries.
DD
Seasonality would suggested that the USD should weaken (leading to a drop in USD/CAD ) in late July/early August, and begin a bearish period until October. However, we're currently seeing a strong bullish divergence momentum phase. This is significant as we can identify two fairly recent ranges that broke higher (February & April 2019) on bullish divergence .
The bottom line is that we have contradictory signals, which means that a prudent trader should stay on the sidelines until a clear breakout develops.
I've identified two target levels for both longs and shorts, depending on how the range breakout occurs. But I won't be entering a trade until a clear, and strong, break of the range boundaries occurs.
Let me know if you have any queries.
DD
Comment:
UC is currently breaking the upper boundary of the range. I'm waiting for a H4 close (30mins time for my timezone) to determine if it's a false break or not. Even then, I'll scale in to the entry.
Comment:
It's a bit of a worry that UC dropped quickly after breaking that range. There's also the possibility of a momentum divergence on a H1 timeframe. Signals from lower time frames than my trading one (so lower than H4) aren't conclusive for me... But they are a factor in my decision making. See this screenshot:
