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Today’s Trading Edge: USD/CAD Bearish ABCD Pattern

Posted by Edward Moya on Nov 15, 2013 10:11:00 AM

WWM USDCAD NOV 15 2013

Price action on USD/CAD is currently forming a potential bearish ABCD pattern on the 240- minute chart.  The distance from A to B has ideal symmetry to the C to D leg and point D is confirmed with the 127.2% Fibonacci expansion level of the B to C move.     

The initial reaction to the Canadian dollar was positive this morning after a manufacturing report came in slightly better than expected.  Manufacturing shipments climbed 0.6% in September and August’s report improved to a flat a reading.  The news is helping the USD/CAD trade below the 1.05 level and eventually over the next couple of trading sessions we may finally see a downward move to 1.04.    

The trade: Short USD/CAD at market (currently trading at 1.0470), with a stop loss at 1.0503, and a take profit at 1.0404.  The Risk/Reward Ratio is 1:2. 

Edward J. Moya

Technical Strategist

WorldWideMarkets Online Trading

 

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