USDCAD – Surge In Current Session Reversing Trend of Recent Weeks
The daily candle chart below shows the price history of United States Dollar (USD) against the Canadian Dollar (CAD), known as the USDCAD pair, and trading around 1.1070 right now (as of publication) after moving almost 2 whole cents in today's session.
Over the past month the pair had been gradually edging lower, and today's very bullish reversal pushed the pair 176 higher off today's low of 1.0908, as USDCAD surged.
In the last post about USDCAD in Ideas You Can Trade, a serious recovery was noted as possible if support was found after the pair was described as hanging on to the edge of support. This recovery appears to becoming more of a reality considering today's very bullish move in the pair.
Accordingly, the next target could be near 1.1120 and then 1.1220, which had been reached on January 31, 2014 before making its gradual descent to current levels.If this recovery of today is not sustained further, an equally sharp reversal could put the pair back on its downward spiral.
Below are examples of how to trade a bullish reversal or a bearish continuation:
1. BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ 1.1092 with a Limit to take profit @ 1.1122 and a stop-loss @ 1.1065 Risk/Reward Summary: Limit risk = +30 pips profit / (-27) Stop-loss risk = Gain to Loss ratio = 1.11
2. BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ 1.0983 with a Limit to take profit @ 1.0914 and a stop-loss @ 1.1021 Risk/Reward Summary: Limit risk = +69 pips profit / (-38) Stop-loss risk = Gain to Loss Ratio = 1.81
Medium term daily candle: