usd/cad

A quick view of the USD/CAD pair.

Here is the ten mile view on the monthly chart. I wont take it to any lower time frames because there is a lot of open air between price and historic price action way to its left.

Now we will look and what we see and not we think we can see. On the bottom of the chart there have been two months with quick test into low prices. Each attempt to push lower was quickly bought into, indicating professional money was uninterested in taking this lower and means there has been a bullish change in sentiment.

Price rallied quickly and broke a support/resistance line and closed very strongly above this, the effort to rise that quickly tends to be all consuming and will have had the herd on board delighted with all the points they were making and that the next stop was the moon. You will know by now this is never the case and good trends come and bite hard when reality sets in, but the herd takes a real long time to see reality for what it is, and not what they think. You will have heard me say this at the start of the previous paragraph.

Price hit sellers where there was a pull back, within this area several attempts for higher prices have brought selling instead and price broke down rapidly. Another thing you will hear me say, is what would any buyers here have been buying against?....there was no solid foundation to take it higher and nothing but a wall of selling above. As price dropped is went striaght through a minro support and resistance area, but came back quickly to test this. When I see good quality tests of areas like this it gives me intel on shorting again.

As price drops back more, it reaches the purple line (ok purple ish for you purists) where the origin of the bullish break can be seen on this time frame. Price then drops with no hurry and restests the underside of this now resistance which holds and price is sent down further. All good news for those who can see this unfold in real time. It means you can see the big picture building and that this move down is unlikely to break the two large bearish candles.

At the bottom of the chart I have a black horizontal line which is THE retest long term traders look for. Always expect a reaction here and plan in advance for it, which is the purpose of talking you through this pair. Now that we have hit the real origin of the move, we see a bullish engulf immediately after the origin was reached. This says, for the moment there is no further bearish interest, it also says the bulls have stepped in and showed their hand.

The fourth candle on this black line shows a subtle retest and again no interest in taking this further and again more bullish activity. On a lower time frame there would have been an entry right there. If you missed it, there was another long entry where price came back to test the last bullish move up, this is icing on the cake for longs and was where lots of longs came in to help push price to where the first target lay, the support line above.

Given that the support line has been blown straight through it shows clearly bullish strength that even the herd can see. The last months candle closed with a test of this line, very important and the current months candle is looking to push up even more.  As price rises more and more sellers will bail and aid price to rise with less in its way. If you look left and up a little, there is a down arrow. This is an area I will watch for waiting sell orders. There was a powerful break down here and some orders will still be sitting. The next few weeks will answer that question if the current bullish momentum is maintained. Over head are two areas of stacked supply, fortunately these tend to aid price to break through because the first lot of selling was tested quickly which takes in many more bearish orders. So now little should remain there.