Michael “Robinhood” Storm here, Signing in again here with a potential trade set up on the USD/CAD pair…
We have been pretty stacked to the short side on the euro dollar and pound dollar pairs and you know what happens when we get too heavy with the shorts. That’s right, there is a possibility of a short squeeze and shakeout happening now. See the charts at the close of Thursday’s session there were MASSIVE amounts of ascending triangle patterns on all the charts and all the time frames…. HIGHLY indicating we were going higher. And Higher we went, and it looks higher still ! Just a lousy 23.6 FIBO retracement on the daily puts us up another +150 pips on the euro. It is possible. SO, let us look to the USD/CAD
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Here in these charts you can see several things. Notice that CRITICAL daily support has been busted! The circled areas indicate the danger zones. Also look at the FAKEOUT breakout that happened on Thursday’s session:
The circled area is the fakeout breakout. That trapped a lot of people! And what is happening now? A real honest to goodness knife fight. A very bearish looking pattern on the hourly and the 15min indicating to me that we are heading toward PARITY, yes one for one. Or shall I say the potential target on this is 1.0000 Notice the bearish channel between the lines on the hourly and the WRB igniting the move lower. So far we have not even been able to hit the 50% of this mega bearish hourly candle! A real good sign indeed.
SO, watch this Monday and Tuesday, should we break 101.50 we could well have a 100+ pip movement really fast. Specially if the euro and pound squeeze higher. Also consider the possibility of a bounce first. That would be an ideal entry…. to get short in the vicinity of 1.0200 to 1.0220 areas with a stop above 1.0255 Till next time, happy trading !
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