USD/CAD Consolidates Ahead of Breakout
Market Condition: USD/CAD Pending Breakout
Target 1:1 X Range Bullish 1.3784 Bearish 1.3004
Target 2: 2 x Range Bullish 1.4044 Bearish 1.2744
(Created Using TradingView Charts)
The USD/CAD is set to conclude Thursday’s trading this week with the creation of an inside bar. This price pattern, which is depicted above, has been created with the USD/CAD failing to exceed Wednesday’s high or low. These points may act as values of support and resistance as traders prepare for the pairs next breakout. Bearish breakouts may begin beneath the low of 1.3264 while bullish breakouts may begin above the Wednesday high of 1.3524. Traders may extrapolate a 1X extension of the 260 pip range to find initial breakout targets. This places initial bullish breakout targets near 1.3784, and bearish targets at 1.3004.
Traders should consider that the USD/CAD may consolidate for the remainder of the trading week. In this scenario, traders may elect to trade the range or wait for a breakout using entry orders. Also, it should be noted that false breakouts may occur. In the event of a market reversal, traders may consider using ½ the distance of the identified range to create a 1:2 risk reward ratio.
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