Today we’ll be going through the lower time frames on the U.S. dollar versus the Canadian dollar. With price continuing to create higher highs and higher lows, let us look at a potential long set-up.
On the 4 hour chart above we can see that the neck line of the inverse head and shoulder as well as the descending trend line was broken with price beginning to break to the upside again now after consolidating around the 1.33000 area.
On the 1 hour chart, we can see that the bullish momentum is continuing with the most recent candle printing a bullish engulfing creating a higher high on this time frame. For the best possible risk to reward, I would wait for price to create a higher low around the 61.8 fib level which will also provide a retest of the neck line area as well as the descending trend line. If price continues to create a new high without any retracement to the desired level, it will invalidate this set-up.
Remember to use correlating pairs to your advantage and to always wait for candlestick confirmation before entering any set-ups. Subscribe to receive updates sent directly to your e-mail.