Technical Analysis USDCAD : 2014-05-06

Good afternoon, dear traders. Today, we consider the USD/CAD in the H4 timeframe. Currently, the D1 is the dominant trend. In a more detailed scale such as the H4 chart, bears determine the movement direction. The daily descending resistance is confirmed by the latest ParabolicSAR trend indicator values. Moreover, we are witnessing the breakthrough of the Head and Shoulders neckline. This occurred along with the Shooting Star bearish candle formation marked in yellow in the figure. It is assumed that the downside momentum strengthened after the breakthrough of the RSI-Bars ascending support line. It is most likely that the observed correction is transformed into a bearish trend. It should be noted that the potential price movement direction is also supported by the PivotPoints as the price crossed the signal line from above and the width of the channel is narrowing. The consolidation precedes the new market momentum.
It would be wise to place the GTC sell order below the first PivotPoints support, which coincides with the historic lows at 1.09338. The preliminary target is located at the previous historic lows around 1.09160. This support is confirmed by the first PivotPoints support. When the target is reached, it would be wise to switch the position into a breakeven mode or close it. In the first case, we should move the TP to the next historical level at 1.08751. The Sl is selected according to the nearest support level at 1.09881 and moved following the ParabolicSAR every 4 hours.

Position openingbelow 1,09338
Preliminary target above 1.09160
Preliminary stopabove 1.09881


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