Let’s examine the USD/CAD currency pair on the H4 chart. The price formed a bullish channel after the reversal next to the daily support line. It was confirmed by ParabolicSAR trend indicator and Donchian Channel bias. The depth of the reversal was defined by the candlestick pattern called “absorption” (marked in yellow). Now we are looking forward to further strengthening of the dollar against the most liquid currencies amid the European QE program and the possible exit of Greece from the euro zone.
Conservative traders are recommended to wait for the resistance breakout at 65% on the RSI-Bars chart to get the confirmation from the bullish market. Currently the oscillator indicates uncertainty: the signal is consolidated inside the triangle. However, the resistance breakout is likely to result in volatility momentum and the price intersection of the level at 1.26161. This mark can be used for opening a pending buy order with Stop loss placed below the last fractal at 1.25066. This support level is confirmed by Parabolic historical values and the H4 trend line. After pending order placing, Stop loss is to be moved every four hours following Parabolic signals. Thus, we are changing the probable profit/loss ratio to the breakeven point.
|Buy stop||above 1.26161|
|Stop loss||below 1.25066|