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USDCAD Price Action Analysis – 31st May 2017

USDCAD has been down trending on the H4 chart. In fact, the price has been within a down trending channel, which has been obeyed by the price number of times. By looking at the price behavior, I assume that the down trending channel is going to play an important part on USDCAD. Yesterday the price had another rejection from the resistance of that channel. It means going short would be able to offer an excellent risk and reward ratio. Let us have a look at the chart and the channel…

Have a look at the down trending channel’s resistance lines. The price obeyed it three times so far. Yesterday the resistance line produced another solid bearish candle. This is an indication that the price would come down to make new lower lows. Here we should wait for a breakout at 1.34500, which is today’s lower low as well. Let us have a look at the summary of the trade…

• Sell Stop Order: 1.34500
• Stop Loss Level: 1.35000
• Take Profit Target: 1.33500
• Validity: 24 hours
• Whenever possible, move the stop loss to the entry price and whenever you want, you can take profit anytime as long as you feel comfortable

Trend line plays an important part in price action trading. However, drawing a trendline alone can be deceptive. On the contrary, if we draw channel, we would be able to find the support or resistance lines easily where the price is going to react. The charts do not always give us the opportunity to draw channel though. However, we should always keep our eyes on the chart whether we are able to draw a channel.

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We hope that you enjoy our Free Forex Trading Signal today: USDCAD Price Action Analysis – 31st May 2017

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