Sophia Todorova has a background in teaching and psychology, and as such relishes the idea of assisting new traders on their journey to Forex trading success. Technical Analysis is her passion. The charts speak, and she listens.
Much like Audusd, the Audcad currency pair consolidated for several weeks within a channel before breaking out in a decidedly bullish manner to resume its previous trend. The monthly chart below shows a strong bar above the 1.0200 resistance level which capped further gains for so long. In keeping with the usual tendency of retesting broken resistance/support, we saw a pullback on the weekly timeframe, and now I will be watching for a retest upon the close of April’s breakout bar. Further to the upside, a green horizontal line indicates a previous resistance point at 1.0550 that will become a major target for longs.
I will be watching the 4-hour chart for a long setup if the expected retest were to play out. The .786% fibonnacci retracement level of the most recent upswing is seen at 1.0246, so that could be the point at which we will see the bounce. However, the up trendline is just below at 1.0190s, and since the trade setup is based on an expected retracement to the broken resistance on the monthly timeframe, there is a strong probability of the 4-hour trendline being tested. I would like to see a move towards the levels mentioned, and a strong bullish engulfing bar, or other candlestick formations to confirm entry on a long.
Thanks so much for reading. Do enjoy the rest of your weekend, and I wish you profitable trading for May!
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