Published On: Mon, Feb 20th, 2017

Looking for USDCAD dips near projected right shoulder



USD Index

We missed our prime support level of 100.25 on Friday (reached a 100.40 low). The index seems to be in a corrective AB-CD formation higher, before the next aggressive selloff. There is nothing to say it will not make it to the aforementioned support (at 100.25) so we only look to buy into US dollar dips today. Expect trading to remain mixed and volatile while we play out this sequence. 

Source: Saxo Bank
USDCAD offers a good dip buying setup.

Monthly – Bearish Gartley after posting an evening star formation from the 1.4689 high. The long-term outlook remains negative. 

Source: Saxo Bank 

Weekly (one) – Rejected levels close to the 50% pullback of 1.3574 and broke the channel formation to the downside. Now inside the weekly Ichimoku cloud, making daily results mixed. Reverse trendline resistance is now seen at 1.3000.

Source: Saxo Bank 

Daily – Forming an ending wedge pattern. I doubt the breakout will reach the wedge target at 1.3600. For the last five days we have closed little net changed. Note the daily Ichimoku cloud resistance near the aforementioned trend.

Source: Saxo Bank 

Intraday (two-hours) – The dip was bought close to the Fibonacci confluence area at 1.3018. We have moved higher, but rejected gains close to 1.3120, a level that has been pivotal.

Source: Saxo Bank

Intraday (one-hour) – Possibly forming a reverse bullish head-and-shoulders pattern. There is no clear indication that this corrective formation has completed. Buying USDCAD close to 1.3052-1.3032 offers a great risk/reward. I will post an update if early buy signals are triggered.

Source: Saxo Bank

On a break of 1.3130, the measured move is seen at 1.3240 and offers a good risk/reward. 

Management and risk description

Counter-trend trade. On a move through 1.3130, place stop at entry.


Entry: Dip buying USDCAD close to 1.3052-1.3032

Stop: 1.2975

Target: 1.3240 and 1.3300

Time horizon: this week 

— Edited by John Acher

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