Sunday, June 3, 2012

CADCHF Analysis 3 June 2012

CADCHF has literally screwed bulls in the recent bull trap. Hopefully, many of you would have gotten out at breakeven through sound money management strategies.

In H1, we see a nice head and shoulders, further confirming that the trend has changed.

In H4, notice how cadchf close above 4 weeks of high and immediately headed southwards. We can clearly see that the whole of last week was a bull trap, just awaiting for non-farm payroll before the trap closed. With this being said, we would certainly want to short this pair.

I have marked out the level which has been the high for 2 weeks. This level is a good level for us to short this pair because it is not only a good resistance level, it is also around 31.8%, a fibonaci level.

I would strongly recommend to take this trade if price indeed retraces to that level because the probability of this pair heading all the way south is very high and the next opportunity to short this pair may not prove to be so profitable since you miss the big move.

We are targeting last week's low as a potential target of 0.91925, a profit of more than 100 pips from our entry point.

Shorted @ 0.92838 with a valid trigger as price nicely bounce off fibonaci 23.6% with an evening star bearish candlestick pattern

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