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A fairly quiet day across the market yesterday produced a bullish inside bar on USDCAD. This is coming off last Friday’s bullish break of consolidation following the outstanding NFP figures.
USDCAD has been in a strong uptrend since 2012 but the more notable rally began in July of last year. While some have called this run exhaustive and ready for a pullback, it’s important that we trade what we see rather than what we want to see – and what we see is a market that doesn’t appear ready to succumb to the bears.
Yesterday’s quiet price action gave us a trade opportunity in the form of a bullish inside bar on the daily time frame. While a stop loss below the mother bar would prove unfavorable, a more aggressive and more favorable approach would be to place the stop loss below the inside bar itself.
To the upside, we have a couple levels to keep an eye on including 1.2800 and 1.3000. The 1.2800 handle is marked by the 2015 high. In fact this level represents a six-year high for the pair, while the 1.3000 key level can be seen acting as resistance between 2008 and 2009.
Summary: Potential to trade yesterday’s bullish inside bar with a target of 1.2800 and possibly 1.3000.