USDCAD Short Setup With Room to Run
-
By
Justin Bennett
- / January 3, 2019
Channels are by far my favorite way to identify opportunities.
They occur more frequently than most realize and they can offer incredibly precise entries and exits to those with enough patience.
In fact, I’m convinced that you could develop an entire trading edge around nothing but ascending and descending channels.
USDCAD has formed two such channels recently.
There is a sizeable ascending structure that extends from the April low and June high.
Then there is the smaller one that began in October.
One of my rules for trading channels is that I never trade upside breaks of ascending patterns. The same goes for downside breaks of descending ones.
Notice how USDCAD is still holding below the larger channel resistance.
However, the pair recently broke to the upside of the smaller pattern. That type of break is more likely to be false than anything else.
Which brings us to today’s price action…
If the USDCAD closes the day below the 1.3550 area, it could set up a favorable short opportunity.
Are you using New York close charts? If not, you’re exposing yourself to ‘false’ price action signals.
Go here to get instant access to the same charts I use.
I will personally look for an entry up around 1.3565. This is the intersection of the smaller channel top and a horizontal level that has been in place since December 24th.
Note that the pair is also in the process of carving a weekly bearish engulfing pattern.
It’s a close call, but this week’s high did extend a few pips above last week’s. It’s one more sign that the pair may have reached a top, at least in the short-term.
As for a target, I’d keep an eye on the larger channel support. That could be anywhere from 1.3000 to 1.3100 depending on the selling pressure.
USDCAD sellers will also need to get through the smaller channel support. That level will likely come in somewhere near 1.3400.
In summary, a daily close below 1.3550 would establish a short opportunity from the 1.3565 (new) resistance area with targets of 1.3400 and 1.3000/100.
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Leave a Comment:
56 comments
Thank you
ReplyYou’re welcome.
ReplyThank you.
ReplyAnytime, Maureen.
ReplyWhat i like is that i entered short above 1.3600 based on doji, and long tailed bar from yesterday at channel resistance. I wouldn’t have chance to do this without following this blog and remembering previous year daily/weekly set ups from Justin on USDCAD. So far so good 🙂
ReplyCheers, Rafal. Pleased to know the content on this site is helping.
Replythanks bro
ReplyYou’re welcome.
ReplyThank you sir
ReplyAnytime, Dasun.
Replyusdcad buy or sell? please me
ReplyRead the post, or just the title. 😉
ReplyThanks very nice brothe… Now need EUR JPY analysis
ReplyI just commented on it yesterday:
https://dailypriceaction.com/daily-setup/eurjpy-clues-point-to-800-pip-target
ReplyHi Justin, any idea what happened last night with JPY? Big moves on these currencies.
ReplyThin markets in what has been a risk-off environment. That’s a good enough explanation for me.
ReplyNice one
ReplyCheers.
ReplyGreat work Justin
ReplyCheers. Thanks for commenting.
ReplyJustin i am totally agreed with you.
ReplyI love this setup..I will be observant to sell USDCAD soon as explained…I also took a sell on EURNZD according to how I have learnt from the way you do your analysis.
Replywow
ReplyThank you
ReplyYou’re welcome.
ReplyThank you as well Justin
ReplyMy pleasure, Anita.
ReplyI want to subscribe to your channel, please guide me
ReplyIf you’re referring to the member’s area, you can join here:
https://dailypriceaction.thrivecart.com/daily-price-action-lifetime-membership/?coupon=DPA2019
ReplyJustin, in this case with shorts do you wait till end of NY close chart ? Or do you wait for pull back?
ReplyThat’s the type of content I cover in the membership area. You can learn more here:
https://swingtrading.dailypriceaction.com/lifetime-membership
ReplyUSDCAD is also coming down off weekly supply zone created 4/30/17 (1.3650-1.3800)
ReplyThanks sir and a happy new year
ReplyYou’re welcome. Happy New Year to you, too.
ReplyThanks for insight on this boss more grace…
ReplyYou’re welcome.
ReplyI started trading from January 2018 but I can tell so far I have found you are a genuine person/mentor I can follow. all of your forex review have a passionate explanation. thank you
ReplyIt’s my pleasure. Feel free to reach out with any questions.
ReplyI really love your analysis. I expect to join your channel soon. I need some times for preparation. I only have local bank account. I am from Indonesia. Can i pay via local bank account?
ReplyYou can pay via credit card or PayPal here:
https://dailypriceaction.thrivecart.com/daily-price-action-lifetime-membership/?coupon=DPA2019
Replythank you sir….
ReplyAnytime!
ReplyThank you sir, nice setup
ReplyYou’re welcome.
ReplyHow do u manage the negatives swap if it is a long term trade for this pair?
ReplyIt’s part of the cost of doing business.
Replythank you Justin
ReplyYou’re very welcome.
ReplyI want to subscribe to your main 24H channel, can you please guide me in that
ReplyTHANK YOU. FOLLOWING UP CLOSELY
ReplyYou’re welcome.
ReplyI regret not trusting you on this one thought you are one of those fake Forex traders but thanks for teaching me a lesson…life time membership in mind
ReplyJustin, thanks, requested and you nailed it. I still can’t believe your kindness for sharing all this for free, you have a big heart.
These diagonal levels can be quite subjective…Example…I have another channel that starts off Sept, 2017 low and Feb, 2018 low paralleled by Oct, 2017 high. If you use this channel, you will see that the high of Jun, 2018 was a false breakout and so is this last high of Dec, 2018. This agrees with your idea of never trade upward break of ascending channel and vice versa.
But all those false breakout validates your inner channel lows. Seriously multiple channels on this pair!
Again, thanks, you are kind!
ReplyCheers, Daniel. Thanks for commenting.
ReplyJustin, what are your thoughts about USDCAD this week?
Replyhttps://dailypriceaction.com/daily-setup/usdcad-shorts-favored-below-1-3380
Reply