I think it might be a good time to trade this pair, short oil, long cad. You can size each leg based on volatility, to risk 1% per side, if price moves against you by 3 times the average true range value of each instrument. Once the spread closes or is close to closing you can get out of both trades.
2 weeks ago I sold the 0.715 PUT in /6C ( D61! ). I was looking for it to range back down and initially it did but never hit my target profit (2 ticks away). Since then it's run away from me a bit and followed the Light blue line just like TRON taking the Light train to the exit.
As the Canadian dollar is a proxy for Crude oil also CL1! I'm looking for Crude to...
Get your ass on board.
Set a stop loss just in case of emergency.
HUGE risk-reward possibility.
Check also out my idea linked below which takes the inverse pair a bit more in a technical sophisticated way.
The red arrow indicates direction, but it will be a bit more fuzz to get there. But you get the picture; We are heading up.
Do you have a thumb for me? :)
The pair USDCAD is in a corrective structure.
USDCAD has performed a 38.2 retrace from its top and has now broken out of its upper wedgewall.
This will most likely be a fake breakout, because it is the GANN-resistance which is important here. It is meeting a significant resistance @ overbought conditions and its momentum is stretched and turning.
Reasons to be be short:
- Breakout of Bearish Flag
- Right shoulder completion of Head & Shoulders
- Touch of pivot point, 200ma, and flag
- Elliot Wave Correction
- Potential leg CD of a bullish crab forming
Please take a look at my crude oil chart description to view the fundamentals behind this trade
We can take this long here, risking a drop under 0.97612. Target is not set in stone, but watch how it evolves. We're testing a critical support level, but also facing considerable resistance, so we might have to be patient. I still think the trend will continue to be up, so, not a huge concern to hold this.
PS: I had a moderator comment...
Based on Prior move from Overbought in final downtrend, I am looking at the count of the move after the trigger day and applying that same thought process to the current setup.
In external prior cycle work I have the following turn dates:
EURUSD - Sell August 18
GBPUSD - Buy August 16
USDJPY - Buy August 15
USDCAD - Buy August 23
Based on this I would look to...
In this chart I illustrate how drastic the outperformance of oil is against cad.
Whenever this happens, we have a trade opportunity at hand. See related ideas for a chart by Tim West on this same subject.
We can anticipate inverse oil's performance to improve relative to USDCAD, and thus, expect either USDCAD to stall or retrace, or, USOIL to fall rapidly and...