The first thing that catches the eye on the above chart, is the drop to the long-term green support line based on the previous lows.
When we take a closer look at the chart below, we can see that although the exchange rate moved a bit below this support line, the bulls responded by pushing the pair higher, resulting in the invalidation of the earlier tiny breakdown.
Earlier today, we noticed another move to the upside, which not only invalidated yesterday’s drop below the green line, but also the earlier breakdown below the lower border of the declining red trend channel. Both of these invalidations are bullish signs.
Additionally, the current position of the daily indicators suggests that further improvement is just around the corner. Should this be the case and USD/CAD extends gains from here, the initial upside target will be the previously broken black line – that is the neck line of the head and shoulders formation.
Taking all the above into account, opening long positions is justified from the risk/reward perspective. All details below.
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All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits’ associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski’s, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits’ employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
This article was originally posted on FX Empire
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