Good evening team,
Despite the choppy action on the EURUSD, we are still trading in the direction of US dollar weakness. The DXY appears to be breaking down from a triangle structure which should also lead a breakdown from a bear flag formation on the USDCAD.
DXY Triangle Formation (B wave corrective triangle)
USDCAD 1 Hour Chart
The USDCAD has set up a bear flag formation, also known as a counter trend or corrective rally. Very text book trade setup here and we are looking to target the next support zone at 1.2856.
Trade Setup: SELL STOP, entry price 1.2959, stop loss 1.3025 and take profit target 1.2856.
Stop loss: 66 pips
Take profit: 103 pips