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USD / CAD: Short trading setup validated


USD / CAD: The loonie remains stable against the greenback. We can do this as part of the presented, validated short trading setup use.


Data provided by

of IG customers long.

of IG customers short.

Changes in

Long positions

Short positions

Open interest

Every day 5% 6% 5%
Weekly -9% 30% 4%

USD / CAD validates short trading setup

In the past week, I pointed out two potential trading setups in the USD / CAD currency pair. (USD / CAD: pair offers two trading setups again). The short setup could be validated first. With this article I want to briefly show how the previous analysis becomes a practical trade and how this trade can be managed in the course of the process.

  1. Shortly after the analysis, it almost looked like the long setup was being validated. But the downward trend line and the round mark of CAD 1.34 per USD were not exceeded. The USD / CAD rate made a high and then collapsed. Since the price had previously risen, the short-term uptrend line also moved upwards.
  2. The horizontal one Support area and the trend line no longer coincided. This had to be taken into account later. The entry in the short direction was therefore not made when the trend line fell abruptly, but only when the horizontal support was undershot. The hedge via Stop loss was made above the declining long-term trend line.
  3. The currency pair fell more dynamically after breaking below the horizontal support. The trade now had to be managed by taking part of the profit when the 76.4% Fibonacci levels. The currency pair is currently recovering from this level. However, the stop loss has already been drawn. The risk is zero.
  4. If the currency pair continues to recover, it will continue to be interesting for a long opportunity later, but if it falls, we can participate in it with the current position, provided we are not stopped out at the start.

USD / CAD rate on a four-hour basis

Source: IG


If you are on the buyer’s side and mean that USD / CAD Course will continue to rise in the future Barrier options from IG with a knock-out threshold, below the last low at 1,33CAD to be interesting. Bearish traders, on the other hand, could, conversely, with a knock-out threshold above the resistance at 1,35 CAD limit their maximum risk of loss at the top.

Options are complex financial instruments and come with a high risk of losing money quickly. Losses can occur extremely quickly.

Do you want to learn more about options trading? These two articles and more will help you familiarize yourself with options trading:

Twitter channel can be found at @DavidIusow. In addition to the publication of the articles, trading ideas and relevant events are promptly commented there.

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