USD/CAD – Trading a Bullish Continuation Scenario

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USD/CAD - Trading a Bullish Continuation Scenario

Last week, USD/CAD broke above a month-long consolidation channel. Let’s take a look at the 4H chart to follow this breakout and assess a bullish continuation trade idea.

The USD/CAD is in a bullish continuation mode, but is retreating from the November/2014 high at 1.1466. There is a support cluster at the 1.1290-1.1325 area. Let’s say we have an entry at 1.1325 and a stop at 1.1275. That is a 50-pip risk. Now, let’s have a conservative target, one that does not break above the Nov/2014 high even though a bullish continuation would suggest the break higher. A rally to 1.1450 still gives us 125 pips, and a reward to risk ratio of 2.5:1 for this trade.

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Fan Yang has been a professional forex trader and analyst since 2007. He specializes in technical analysis and has a Chartered Market Technician designation since 2011. He was the chief technical strategist at CMSFX He was also the founder and chief currency strategist at FXTimes Over the years, Fan has not only been a trader and analyst but also an educator. As a proponent of both technical and fundamental analysis in trading, Fan advocates simplicity and discipline as key factors in making trading decisions when faced with so many "clues" and "signals". Currently Fan Yang is the chief currency analyst and webinar instructor at forexminute.com.