Today we have a very basic yet effective setup on the USD/CAD!
Today’s technical analysis is nothing more than a couple horizontal support and resistance lines keeping the USD/CAD in a pretty nice range on the daily chart.
our major resistance line is drawn across the highs of the 07/06/10, the 05/07/10 and the 24/08/10 which as you can see below is holding very nicely!
We then have two major support lines drawn up, the first connecting the lows of the 10/06/10, the 13/07/10 and the 18/08/10 which has been broken several times and then acted as resistance given us a bearish bias.
The second of the major support levels connects the lows of the 03/05/10, the 13/05/10, the 21/06/10 and the 05/08/10, a price level which has not been broken since the end of April this year.
Ok now for our entry!
I personally have entered short at 1.0612, ideally you would want to enter anywhere above 1.0600 but as this is a longer term trade a late entry shouldn’t dent your reward: reward ratio too much.
As for our stop we want to place it a little further than the major resistance level we’ve identified, I personally will be placing my stop at 1.0690 giving me a stop loss of just under 80 pips, however if you wanted to be a little more conservative in your stop placement you could place it 10 – 20 pips further than the psychologically significant round number at 0.0700.
We have plenty of downward room for a nice 300+ pip take profit, I personally will be placing my initial take profit at 1.0300 but if the pair gathers some momentum I will consider moving it down to 1.0180 and possibly even further.
Hope you guys have enjoyed reading
Happy trading, Lee J Brown
http://www.profxblog.com/
No comments:
Post a Comment