USD/CAD Top Down Analysis - Short term and Long Term Setups
Happy Sunday and Labor Day Weekend for those celebrating! However, the FourX market never goes on holiday.
Updated outlook and analysis on USD/CAD - we have some very interesting confluence at important levels to determine the controlling trend.
We are currently in a daily pullback (uptrend) within a HTF downtrend with signs of either:
1. Reversal from LTF Pullback back toward HTF downtrend
2. HTF Bullflag to break us out of downtrend and created higher high
In both these scenarios, I believe we have a short term move down first. We are at the tops of trend lines and strong resistance levels and this would be the point from where we begin to drop.
All the resistance points above us lead me to believe that we need more liquidity and momentum from demand levels below. It’s too big a fight as it is now.
Confluence:
- 70.70% retracement level & 1.400 psychological level resistance
- HTF Double Top at this level (April 2023)
- 61.8% golden retracement level resistance – 1.367 level
- LTF Double top at this level (Aug 2023)
- Support turned resistance on breakout below trend line support (2HR Chart)
- Resistance at top of weekly downtrend channel
- CHoCH supply zone mitigated (this is our short trade entry zone)
- Large demand zones and untapped liquidity below
Now, while I do expect a drop toward these demand zones for buyers to regain liquidity and try to reverse us out of this downtrend, we are still well within our HTF uptrend pullback, meaning this could be a smaller pullback within a HTF uptrend and potential break of new highs. Therefore, this liquidity pull and subsequent drop will be mainly to sustain our future attempts at new highs. And this reversal to the upside can happen again at any point – especially as we’ve created a strong level of support at the 50% fib retracement from weekly time frame swing H’s and L’s. That 1.336 level would be our trade Take Profit 1
LTF/Short Term Trade setup:
Stop Loss: Above 61.8 Fib level – 1.367 or Fib 70.7 level – 1.39
Take Profit1 : 50% HTF Fib level and demand zone/POI - 1.336 = 4.7 R:R
Take Profit 2: HTF Demand zone and stronger POI – 1.300 Psychological level = 8.75 R:R or 2 R:R (for higher stop loss)
If we take profit, and see support growing at either of these levels, we will consider our bullish trade entry and as buyers attempt to fulfill the HTF bull flag that’s very much in play
Update to last week's USD/CAD Trades
My initial setups (linked below) that I posted last week were shorter term setups that we took as objective points. Meaning, where price has the likelihood to go to first in order to get to its main/larger objective. Objective points are areas where buyers or sellers might want to grab liquidity from on the lower time frames in order to fulfill its higher time frame main objective.
In this case, my objective points were fulfilled on:
Trade #1:Linked below “USD/CAD Quick Scalp 2.5 R:R” where we utilized the move toward the supply zone knowing we wanted to mitigate this zone created by a minor CHoCH – so this zone acted as an objective point for a larger move I called out:
Trade #2: Linked below “USD/CAD LTF Trade Setup” which was to short from the supply zone to the next Break of structure (Which we hit) – this larger move was also an objective point for an even larger HTF trade:
Trade #3: Linked below “USD/CAD Short Trade with a 4.93 R:R” which is bringing us towards our higher time frame demand zone / 50% retracement. Trade still active.
Please see related links and videos to get a better understanding and continue hitting these TP's!!
- FourXTrader
Updated outlook and analysis on USD/CAD - we have some very interesting confluence at important levels to determine the controlling trend.
We are currently in a daily pullback (uptrend) within a HTF downtrend with signs of either:
1. Reversal from LTF Pullback back toward HTF downtrend
2. HTF Bullflag to break us out of downtrend and created higher high
In both these scenarios, I believe we have a short term move down first. We are at the tops of trend lines and strong resistance levels and this would be the point from where we begin to drop.
All the resistance points above us lead me to believe that we need more liquidity and momentum from demand levels below. It’s too big a fight as it is now.
Confluence:
- 70.70% retracement level & 1.400 psychological level resistance
- HTF Double Top at this level (April 2023)
- 61.8% golden retracement level resistance – 1.367 level
- LTF Double top at this level (Aug 2023)
- Support turned resistance on breakout below trend line support (2HR Chart)
- Resistance at top of weekly downtrend channel
- CHoCH supply zone mitigated (this is our short trade entry zone)
- Large demand zones and untapped liquidity below
Now, while I do expect a drop toward these demand zones for buyers to regain liquidity and try to reverse us out of this downtrend, we are still well within our HTF uptrend pullback, meaning this could be a smaller pullback within a HTF uptrend and potential break of new highs. Therefore, this liquidity pull and subsequent drop will be mainly to sustain our future attempts at new highs. And this reversal to the upside can happen again at any point – especially as we’ve created a strong level of support at the 50% fib retracement from weekly time frame swing H’s and L’s. That 1.336 level would be our trade Take Profit 1
LTF/Short Term Trade setup:
Stop Loss: Above 61.8 Fib level – 1.367 or Fib 70.7 level – 1.39
Take Profit1 : 50% HTF Fib level and demand zone/POI - 1.336 = 4.7 R:R
Take Profit 2: HTF Demand zone and stronger POI – 1.300 Psychological level = 8.75 R:R or 2 R:R (for higher stop loss)
If we take profit, and see support growing at either of these levels, we will consider our bullish trade entry and as buyers attempt to fulfill the HTF bull flag that’s very much in play
Update to last week's USD/CAD Trades
My initial setups (linked below) that I posted last week were shorter term setups that we took as objective points. Meaning, where price has the likelihood to go to first in order to get to its main/larger objective. Objective points are areas where buyers or sellers might want to grab liquidity from on the lower time frames in order to fulfill its higher time frame main objective.
In this case, my objective points were fulfilled on:
Trade #1:Linked below “USD/CAD Quick Scalp 2.5 R:R” where we utilized the move toward the supply zone knowing we wanted to mitigate this zone created by a minor CHoCH – so this zone acted as an objective point for a larger move I called out:
Trade #2: Linked below “USD/CAD LTF Trade Setup” which was to short from the supply zone to the next Break of structure (Which we hit) – this larger move was also an objective point for an even larger HTF trade:
Trade #3: Linked below “USD/CAD Short Trade with a 4.93 R:R” which is bringing us towards our higher time frame demand zone / 50% retracement. Trade still active.
Please see related links and videos to get a better understanding and continue hitting these TP's!!
- FourXTrader
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