Loonie (USDCAD) 300816

How to trade this plan
1. Support and resistance zones shown in green and pink with arrows indicating direction. Bulls buy at support and bears sell at resistance.
2. Keep in mind that when price breaks through support the level will be tested in future as resistance – this is called role reversal.
3. Market direction indicated by 21 and 55. Take note of where the 21 is in relation to the 55 and where price is in relation to the 21. Also take note of the width between the two moving averages. If price is below the 21 you may consider looking for selling opportunities. If the 21 is dynamic resistance then if price falls from the 21 it predicts a lower low – the opposite applies when the 21 is dynamic support. If the 55 is dynamic resistance then if price falls from the 55 it predicts a double bottom – the opposite applies when the 55 is dynamic support.
4. Direction of price is indicated by 5 and 8 MA’s and stochastic cycles. Remember that when you line up higher and lower time frames, price is going in the same direction. The goal is to line up market and price while using support and resistance as your leading indicator.
5. Pay attention to reversal patterns on higher time frames when in a trending market – a reversal pattern could mean the end of a trend. Keep in mind that a reversal pattern that is not at support or resistance is meaningless.
6. Pay attention to reversal patterns on lower time frames when confirming your entry and if you want additional confirmation wait for a 5 8 cross on M5 or M1 before entering your trade. Remember – we enter on the second chance on the 5 minute chart.
7. I have added a summary under the H1 chart indicating observations and trade plan.

Note:
a. Please read Kate’s post on Forex Major Currencies Outlook everyday so you are up to date with the latest news.
b. Please be aware of risk events for the day by using the Forex.Today calendar
c. Watch Wayne’s webinar daily at 13:30 SAST or catch the recording on the Forex.Today Youtube Channel

USDCAD Daily

USDCAD H4

USDCAD H1

If you are USDCAD Bear then the setup on the daily chart may be of interest to you. Price is currently at the 61.8 fib of the previous bearish move with, what's becoming, an overbought stochastic. Market is flat on the daily chart though bullish on H4 and H1. Price is at resistance on H4 and has failed to make a higher high on H1 despite having come off the H1 21 with an oversold stochastic during Asia. H1 is a very nice breakout setup. Should price breakout to the upside and make a higher high above DR1 then a bull would look to buy the pull back. Should price fall and make a lower low below support at DPP, a bear would look to sell the pull back. If you are a bear then keep an eye on that H4 21 as bulls may look to buy there. Also note that the support zone on H4 where the 21 is currently located is the level where price broke out on Friday.

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