USDCAD Trend Line Bounce

Hi traders!

Today, the USD made a small rally against the 2 month Beairsh trend on the USD/CAD.

The 40 pip rally puts the USD/CAD in perfect position to short off our recent trend line with a high Reward/Risk ratio.

Last week I shared a NZD/JPY trade that didn’t have the highest probability of winning but I liked the trade anyway due to its generous R/R. 

This USD/CAD trade is a similar situation. By being aggressive and shorting at today’s close, we could enter with a 20 to 30 pip stop and target 80 pips or even a recent daily level 180 pips away.

usdcad_may_20

 

The stop placement is very subjective in this case. I’d recommend 15 to 20 pips above last week’s high (May 13).

As I said, this is not an extremely high probability trade because the market can easily shake us out of the trade; however with the R/R on the table, I think the risk makes sense.

Let me know what you think.

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