USD/CAD Bearish Butterfly Pattern

FX:USDCAD   U.S. Dollar / Canadian Dollar
USD/CAD is starting to show some weakness, finally, thus
offering a chance to short this market as it starts a
corrective move towards the end of this month.

With the current DXY strength and potential for oil prices to
drop , USD/CAD should remain bullish in the longer term but
only after a much needed correction. By looking at the
progressively upwards sloping 200SMA below, it looks like there is
quite a bit of bullish momentum building up. Further
evidence for a bearish correction at this stage is the
bearish RSI divergence.

Nonetheless, this could also be the turning point for
USD/CAD to resume the long term bearish trend , easily
visible on the weekly time frame. All large banks have
forecast USD/CAD to be trading around 1.1500 to 1.2000
within the next 3 months, and Bank of America even
forecasts USD/CAD to trade as low as 1.0867 to 1.0998
within the next 3 to 6 months.

I usually dont go by such long term forecasts, but considering
that all major banks are forecasting USD/CAD to drop to 1.2000
and lower, seems to give credibility to such forecasts.

But, staying in the more immediate present a correction
to the downside per the bearish Butterfly pattern seems

Trade short 1 ( RvR ratio 2.66)
Entry: Close below 10SMA and 1.3231
S/L: 1.3420
T/P 1: 1.2998/80
T/P 2: 1.2729

Trade short 2 ( RvR ratio 2:1)
Entry: Close below 1.2729
S/L: 1.2831
T/P 3: 1.2527
As always, scale out your profits and adjust stop/loss to
suit your personal risk management profile.

Happy trading


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