USDCAD: W for Wendetta, Another Short is Coming
After our successful USDCAD short trade using the "Flag" pattern as a bearish continuation, we have another opportunity slowly but steadily forming in the kitchen. If we zoom out, we can see that this is all a part of the W (double bottom pattern) that has been formed due to recent USD weakness. The common misconception here is that, people sometimes expect bullish continuation after this pattern as they think it's a ranging box. The reality is usually quite opposite. Don't get caught in this. The box is usually has a few more uniform length touches on both sides. On the other hand..
The W trading pattern, also known as the double bottom pattern, is a popular trading pattern used in TA. It is a bullish reversal pattern that occurs after a downtrend, signaling a potential change in trend direction.
The W pattern consists of two low points, or "troughs," separated by a peak in the middle. The price drops to the first trough, then rises to the peak, and then drops again to form the second trough, which is approximately at the same level as the first trough. The two troughs should be spaced relatively equally apart, with the peak forming a "W" shape.
Our plan is to let the price retrace a little (potentially to the most recent 0.618 Fib level), gain more momentum, so we can break the lower barrier and continue our downtrend further on.
The W trading pattern, also known as the double bottom pattern, is a popular trading pattern used in TA. It is a bullish reversal pattern that occurs after a downtrend, signaling a potential change in trend direction.
The W pattern consists of two low points, or "troughs," separated by a peak in the middle. The price drops to the first trough, then rises to the peak, and then drops again to form the second trough, which is approximately at the same level as the first trough. The two troughs should be spaced relatively equally apart, with the peak forming a "W" shape.
Our plan is to let the price retrace a little (potentially to the most recent 0.618 Fib level), gain more momentum, so we can break the lower barrier and continue our downtrend further on.
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