USDCAD setup (bullish trend in trouble)

[stephane]

The bullish trend the pair has been following is in trouble. Since we reached 1,333 roughly one month ago we have been unable to break that resistance. The two daily candles on Thursday and Friday, even though they are strongly rejecting supports around 1,31 and 1,30, are also showing new lows. Yesterday daily candle is a very weak bullish one : that trend is running out of steam.

I will sell a break down of the daily SMA20 , that looks like a support on the daily chart. I will not buy that thing unless we do have a bullish breakout of 1,333 or a new strong rejection of a support around 1,30. And that in my mind would be a short term trade.

 

[stephane]

Obviously it did not work out as I thought : no bearish signals, and instead a retest of the highs at 1,333. I opened a small short at 1,3335, just in case. I will also watch the retest of 1,33 today.

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[stephane]

Here we go. Very strong bearish engulfing candle. I shorted it already once at 1,336.
thre is no points in shorting it here, but the daily 20 SMA is obviously a support. If it breaks down, I will use it as a resistance and will sell signals under it.

 

[stephane]

That one worked nicely, but with a hammer on the daily chart, it is time to close the short and to wait for a pull back before shorting again when the pair reverses on a resistance.