USD/CAD Price Analysis: Bulls pile back in with 1:3 R/R on the table


  • USD/CAD has moved back into bullish territory.
  • Bulls can get back on board protected by a stop loss to target the 1.33 area.

The following trade setup is a continuation of the prior analysis and a trade setup illustrated last week which can be seen here:

Due to unfavourable price action, the initial setup was abandoned and an order was placed at breakeven as follows:

The price triggered the sell order and we went back to the drawing board. 

On Tuesday, the price continued higher taking conditions on the 4-hour time fame into bullish territory yet again.

This opens the prospects of higher highs and an opportunity to get on board with the bullish environment for a second crack at the whip as follows:

4HR chart

The new setup offers 1:3 risk to reward ratio.

The price action will be monitored from a 4-hour time frame for an opportunity to move the stop loss to breakeven and followed up in subsequent fresh news stories.

For a history for how the trade setup has been derived, USD/CAD Price Analysis: 1:3 R/R buy setup, target 1.3300 details all.

Update: Loss and re-entry, FOMC risks

The price action remains choppy into the FOMC and there was a restest of trendline support.

Unfortunately, the stop loss was triggered and the trade had to be reentered at market.

The trendline support has now held three tests.

A higher target at 1.3344 and a wider stop at 1.3129 offer 1:3.2 R/R.

The conditions remain bullish on retest of the counter trendline.

The trendline support reinforces the stop loss that is placed below the structure.

Oil prices are now technically rich on the charts.

The FOMC can go either way. However, a dovish tone would reinforce the cyclical headwinds facing the USD and is a major risk to this trade setup.

On the other hand, the suggestion that Fed may have eased enough given better-than-expected data recently would be very bullish for this trade set up.

Update: Target set to breakeven

The price created new resistance structure and the target was set to breakeven.

Breakeven achieved

The price was volatile in the FOMC event and was unable to break from the consolidation.

Bulls remain trapped below resistance. 

 

 

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