Short term
/
Sell
Trade view / 09 February 2018 at 8:08 GMT

Ending Wedge formation seen in USDCAD

Analyst / PIA First
United Kingdom
Instrument: USDCAD
Price target: 1.2470
Market price: 1.2597
Background

USD index: We expressed some caution yesterday with the USD index close to the 161.8% extension level of 90.25 (from 88.26-89.49). As long as we fail to breach and hold below the trend line support at 89.65, the medium-term bias remains bullish. However, we have to be prepared for the possibility of a substantial USD correction lower today. 
 
USD 2
 Source: Saxo Bank

I have taken a counter-trend sell trade in USDCAD on the back of this mild bearish USD bias. With Canadian unemployment figures today, we could see a deeper correction. 

Here is the technical picture...

Monthly: Inside the Ichimoku cloud. This normally results in the lower timeframes having mixed and volatile trading. 

USDCAD M
Source: Saxo Bank

Weekly: The medium-term outlook remains bullish with the pair trading inside the Ending Wedge formation. DeMark posted an exhaustion 13 count at the low.

USDCAD W
Source: Saxo Bank

Intraday (four-hours): We have rallied to the wedge target of 1.2585. Commodity currencies have a tendency to stretch to the 423.6% extension of the first wave before a reversal is seen (correction). This is located at 1.2598 (from 1.2250-1.2332). We are holding in this zone. Bespoke support is seen at 1.2470.

USDCAD 4
Source: Saxo Bank

Intraday (30-minutes): Forming an Ending Wedge with bearish divergence, chart makes a higher high while the oscillator makes a lower high. On a break of 1.2570, the measured move target is 1.2492.

USDCAD 30
Source: Saxo Bank

Parameters

Entry: short at 1.2575.

Stop:1.2625.

Targets: 1.2490 and 1.2470.

Time horizon: short-term (counter-trend).

— Edited by Michael McKenna

Non-independent investment research disclaimer applies. Read more
A compiled overview of Trade Views provided on TradingFloor.com is found here
09 February
matsuri matsuri
error in targets: should be 1.2490 and 1.2470 I suppose as higher in the trade description
09 February
Ian Coleman - First 4 Trading Ian Coleman - First 4 Trading
That is correct. thank you. 1.2490-70
09 February
tonyovsalford tonyovsalford
OK to shirt now guys?
09 February
tonyovsalford tonyovsalford
Short lol😂
09 February
HaythamSabry HaythamSabry
GM Ian, what about USDCHF?
09 February
Ian Coleman - First 4 Trading Ian Coleman - First 4 Trading
I am short
09 February
Ian Coleman - First 4 Trading Ian Coleman - First 4 Trading
USDCHF - Intraday - We look to Buy at 0.9315 (stop at 0.9285)

Selling pressure from 0.9470 resulted in all the initial daily gains being overturned. A bullish reverse Head and Shoulders is forming. Expect trading to remain mixed and volatile. Trend line support is located at 0.9312. As this corrective sequence continues we look to set longs on a dip at better risk/reward levels.
Our profit targets will be 0.9470 and 0.9500
09 February
Ian Coleman - First 4 Trading Ian Coleman - First 4 Trading
I should have put 'I am short USDCAD'.....
09 February
HaythamSabry HaythamSabry
Thank you
09 February
Pluis Pluis
Thank you for all the good information you share, it is a joy to learn from you
09 February
andywielkiszu andywielkiszu
doesn't look nice now :)
09 February
Romanatrader Romanatrader
Hi Ian, what is your opinion now after the employment report ? Is USD/CAD still short or long? Thank you Romana
09 February
Ian Coleman - First 4 Trading Ian Coleman - First 4 Trading
a very stubborn bear. think we will close 4 hours with an outside bar... weekly close below 1.2564 confirms the correction
09 February
Morten Olby Morten Olby
Love the metaphor of stubborn bear :-) Will give it another 30 minutes untill all attention drawn to SP500 and Nasdaq. Good weekend to you all and special thanks to Ian for posting so generously during the week. Of the calls that trigger the win/loss ratio is impressive and the return also very solid! Hope you will keep them coming in the same pace in the weeks to come
12 February
Edgaras Edgaras
Hello Ian, do you still consider this trade as possibly valid?
12 February
Ian Coleman - First 4 Trading Ian Coleman - First 4 Trading
hmmmmm . medium term bias is still bullish
12 February
Edgaras Edgaras
thanks :)

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