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Hints of change in USDCAD

Received a few questions with regards to the following tweet which will be clarified in this post.

 

Looking at the Big Picture. We see that price is currently at a strong band of resistance.

USDCAD at Band of Resistance on Monthly Chart

USDCAD at Band of Resistance on Monthly Chart

We can also see a possible hint of the move coming via a forming chart pattern near the resistance.

Chart Pattern Forming in Weekly USDCAD Chart

Chart Pattern Forming in Weekly USDCAD Chart

Zoom into the Lower Timeframe on H4. We can see a 1234 at the right side of the double top. Although point 4 exceeds start of flow, this occurrence is common in a double top pattern, where the WR (pt 4 is higher than start of flow and higher than pt 2) often suggests a valid change of trend. Note this is not the typical 1234 as we teach (typical one is where 4 is lower than start of flow), however, the fact that there is a WR brought attention to this trade.

1234 Pattern on H4 - USDCAD

1234 Pattern on H4 – USDCAD

For USDCAD there are 2 possibilities:

  1. Trade on the second top, where second top can be broken down into 1234 as well
  2. Wait for DT pattern to complete, a down flow to establish minimum in h1, then wait for a 1234 pattern

Ultimately this is a counter trend trade as the previous H4 trend is still up. Price would need to clear below the support for any chance of heading lower.

Last time, many things that I wanted were just dreams, now I see them as possibilities. I’m looking forward to own pent-house suite in Manhattan overlooking Central Park because forex trading with Tflow® makes it possible. Find me on Google+

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