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Looking at the daily timeframe, of course we have two different trends. The blue trend line. Found the baseline down here into the mid The pattern of the trend was a rise. Some congestion here in the black box just ahead of the blue trend line. So, the question of the day will be, or really the week: Of course right now 0. Now, all of that would change of course if we see the breakdown of the blue zone. And when I say a breakdown, we need to see a clear single candle body underneath there at 0.
Look at this interesting area over here on the right-hand side. A significant fall off last week. A little bit of a rally. And only focused on the other side, going short, if it breaks through the red trend line and the blue-shaded area. Of course this pair we have two different trends as well.
The blue trend line, uptrend. Black trend line, downtrend. The black trend line. The head and shoulders pattern. The green line at the top. The blue line as the shoulders. The red line as the neck level.
But again, all of that would likely change. But for the time being, none of that has changed. You take it back over here and you could see the black trend line, the moving average. So, like I said, even up into the blue-shaded area here towards the black trend line and the green moving average, we are still well within the parameters of the head and shoulders reversal pattern to go down and not up. The only reason I would focus in on buying this would be that it breaks back above the moving average and the black trend line.
So, for the time being, I think we only concentrate on shorts with the head and shoulders pattern. Even rallies into the upper We look down to the four-hour timeframe. Again, we could see some hesitation around the yellow-shaded area here, 1. It may just find resistance and go on down from here. Interesting here is I think we have the opposite situation. First thing I would look at would be the blue trend line. Eight days now challenging the blue trend line and the period moving average.
There is no reason to go short on top of that orange-shaded area. Take it down to the four-hour timeframe. You could see the challenge back here. A little gap here, but challenging back down here, 1. Just makes absolutely no logical sense whatsoever.
Only if it breaks through the orange zone do you look to go short. Maybe up here at the blue zone. Maybe at the green zone becomes short opportunities, but at least right now I think the best short opportunity would be a break under the orange zone. Interesting things happening here. The trend I say is up. And there it is, and I think we could probably adjust this blue trend line just a bit.
Again, like I said, the trend for the past couple of weeks has been more bearish that bullish. Are the buyers going to step back in, take back control? If oil goes up, we typically expect this to go down. If oil falls, we would expect this currency pair to go up. So, watch that scenario.
Under the red trend line, yellow zone. So, this is your area to focus in on today. In fact, it could be an opportunity for a short scenario underneath 1. Getting a little bit lower towards the pink zone may be your best opportunity or more likely above the yellow zone. Sellers probably more interested in this pair underneath the low Zoom it out again.
There you can see it just underneath that yellow zone. More likely you would be considering shorts today here for the CAD underneath the yellow zone, 1. We do have a trade. This trade down here. As you could see here on the daily timeframe, there have been multiple trends throughout the year of Five and now the sixth trend for the year. We have been in an uptrend, but a period of congestion, top right-hand corner of the trend. Look at the black box.
The black box shows us that period of ranging, congestion, whatever you want to call that. We are indeed underneath the longer-term blue trend line. Last time we were here underneath it, we saw resistance. If anything, I would say going short right now is a little bit difficult.
Zoom it in one more time. So, going short and selling on top of support does not make logical sense to me. The only reason to go short and sell would be that it breaks this boundary, this barrier, this orange-shaded area. So, it has to break underneath it before we look to go short. And of course above the yellow zone, the green zone becomes our target for potential continuation of the trend. And again, so this orange zone is your main area to focus in on.
Support there, potentially goes back up. This is the other trade that I have going down here from, again, last week, 0. That sell into resistance again.
Black circle back here on the left-hand side. Take a look at the past several days here for this currency pair. We have been kind of in a holding pattern. I took the sell into the blue zone. Of course a little bit of a gap over the weekend helped out a little bit here on the way down. The orange zone of course is clearly our support.
Of course we would love to see the breakdown of that orange zone for a continuation of the trend. Should you buy it? I mean over the past couple of weeks, buying here at the orange zone has been a profitable scenario, so be cautious there. It either needs to be back at the blue zone or under the green zone. Long scenarios probably back above the blue-shaded area. Look back to the blue box. The black box on the left-hand side.
You could see the market bouncing around in there quite a bit between the yellow and the green-shaded area. Zoom it in a couple of times, so we can really get a handle on that red trend line.
Take a look at that. The probably most important thing is recognizing the pattern within the trend. A little bit of a rise there and now we have been in a little bit of a rise here.More...