Thursday, September 11, 2014

LIAR LIAR PANTS ON FIRE!!!

I just got back from King of Prussia Mall and I sat down to look at my charts only to find the USDCAD on a mission to ruin someones good trading week. So to save so many of you the heartbreak, pain, and agony of trying to figure out what to feed this beast, I'll take a minute out of my wonderful life to explain to you what exactly is going on. 
First of all, let's start with the 4hour chart which is shown  in the first figure below.
Now yesterday this pair showed similar bearish divergence on its daily chart and above we see it formed on the lower time frame with an awesome shooting star forming. That leads me to believe there's some weakness in the orders and the price won't be sustained for much longer. Additionally we see a trend line above the price which should keep the price contained. The green line is near term major support (1.090). Let's move on to a higher time frame so we can get a broader view of this pairs behavioral history...

Now in this daily chart of USDCAD we can clearly see a triangle that has been forming since mid 2011. Here we see pressure from the top side of the triangle which could give the pair a range to stay contained within and that story coincides with the divergence on this time frame. The top red line (1.1000) has been resistance up until today when it was disrespected. All of this combined makes me think the big boys are playing with peoples emotions by creating a false break-out just before the strong move downward to the opposite side of the recent range (1.080); the other red line. So this range, the divergence, and the triangle have me in a"froggy"mood. I might just throw a few sell orders in when the coast is clear. 

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