Looney presents some short term opportunity
Happy Friday, traders.
A quick note today to bring a potential short-term setup in the USDCAD hourly chart.
You can see in the chart below that price has been rebounding in a horizontal range for several days now, with both the upper and lower boundaries being respected by price.
Now, these kind of consolidation zones, or rectangle patterns have a few ways they can be traded. Firstly, a trader could try and capitalise in the range, and simply buy/sell any rejection of support or resistance. Due to this being an hourly chart, my preference with these patterns is to trade the breakout in either direction, in an attempt to capitalise on a larger movement.
Long, compressed range patterns such as this can be either continuation or reversal patterns, and perhaps one of the most favourable qualities of these patterns is the potential RR. A trader can set a very tight stop once a confirmed breakout occurs. I’ll be watching for a break in either direction.
Stay tuned for updates and until then, have a great weekend, traders.
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