Short USDCAD – sell at role reversal line
After an impressive run USDCAD seems to be exhausted and needs at least a larger consolidation.
-price broke under support line at 1.2670, which now is resistance (= role reversal) AND
-price on 4h chart is under 20EMA, so for me on that time frame it is not more in an uptrend
Often the price action is to run up towards the last support to test it as a new resistance.
Here that area also aligns with the Fib 50%-Retracement and there is where I would like to short.
Trading idea: limit sell order at 1.2670, Risk-Reward = 3.0
SL@ 1.2720 (-50), TP@ 1.2520 (+150)
Things to remember:
1. Important data for CAD on Wednesday and Thursday (higher possible).
2. Friday is USD Non-Farm Employment Change and CAD Employment Change, so will not trade 1 hour before until 30 minutes after the data, as the could be huge.
3. If price fall below 1.2510 the idea will be not valid anymore and I would not enter this trade
Disclaimer: There is a very high degree of risk involved in trading forex. I assume no responsibility or liability for any trading or investment results. My posted statements and charts may unintentionally include inaccuracies. All content posted is for educational purposes only and is not a financial advice. The presented set-ups are not solicitations of any order to buy or sell.