- USD/CAD is in a phase of expansion which gives rise to prospects of targets either side of the expansion line.
- Bulls can target a break and retest of the 15-min structure for a high probability trade set up.
The price action is offering volatility to work with and the prospects of a trade setup to target 1.3020.
The following is an analysis of the market’s structure in a phase of expansion for a day-trading opportunity.
1-hour chart
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As illustrated the price has moved out of contraction, with an initial failing downside test.
The price then moved across the expansion line to the upside in a fresh bullish impulse.
What we are seeing now is a correction of the impulse for a deep 61.8% Fibonacci retracement back to the expansion line.
This would be expected to hold and the new support offers a buying opportunity to target 1.3020.
15-min chart
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From a 15-min perspective, where the trade setup can be monitored for, there is work to do on the bull’s behalf.
The price needs to get above the structure and resistance.
A buy limit can then be placed with the price back above the 21-moving average and MACD in positive territory.
The stop loss can be left below the structure, the current lows, for a 1:2 risk to reward ratio and high probability day-trading opportunity.
A trend trading opportunity would be expected on a breakout of 1.3020. However, the daily chart is not offering such a picture, as of yet, but it is something to monitor for.
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