Hello guys hope your fine. Lets dive into business. Dollar Cad appears to be interesting for the next week and here are my assumptions and guidelines to get involved. By the way i am a price action trader so what you are about to see here is PPA (Pure Price Action) Trade Setup.
I am going to shove this down from the daily time frame to the H4 focusing on the key areas so as you can grab the best entry available with minimum draw down.
From the current price Dollar CAD has a huge upward potential to test the resistance zone before dropping down for good. So when i zoom in, there is a chance to get along up to that area. But the question remains how will we get involved? How will i get a best entry with the minimum draw down?
Since price has already rallied up so fast in the past 4 days we should a expect retracement which would be visible in the H4 time frame.
Here is where things start to become interesting. From the current market price which appears to be on a minor resistance level. It is of a fact that we should a expect a pull back which will hopefully land to previous support level which inline coincides with the Trend Line. Our main job is to wait for a signal to trigger to go long.
PATTERN CONFLUENCE & EXECUTION
Another confluence is a pattern. To those in love with pattern trading must know the famous Head and Shoulder Pattern. This also appeared in our setups which sums up the odds to go long, But only if we get a pull back so the specified zones of action.
If everything remains constant my entry will be at 1.3365’s and with a stop loss of 25 pips i am looking forward for 150 pips and potential targets which gives me a 1:6 risk reward ratio.
HAPPY TRADING WEEK