USD/CAD Fakeout for a Nice Fade

USD/CAD Key Points

• Price at higher time frame resistance zone.
• Stop hunting 'search party' move through resistance, before pullback.
• Resistance reactived on the intraday chart.

USD/CAD Technical Analysis

Well then. Hasn't USD/CAD played out just perfectly in the end!

We previously spoke about USD/CAD at resistance and asked the question whether it was a breakout or a fade.

These were my thoughts at the time:

"Wherever you find a clean, horizontal support/resistance level like this (and SIX touches is pretty strong), you're going to get a build up of retail or weak money stop buy orders above it.

Buy orders that look juicy as fuck to smart money, looking to build a larger sell position.

So price poked it's head through resistance, cleaned out the stops and now tucking back under the resistance zone, I'm looking for some sort of reactivation before getting short."

You can have a full read of the post by clicking the link above, but that extract gives you the gist.

Now take a look at the updated USD/CAD 4 hourly chart:

As you can see, that price action is pretty much exactly what we spoke about.

Price poked its head through resistance, allowed the smart money to load up by cleaning out all of the buy stops and then tucked back under the level once again.

If you look at the updated chart I've attached and arrowed, you can see that price reactivated the resistance zone with a pullback.

From there, it was all about finding short term support turned resistance on the intraday charts to get entry levels with good risk:reward.

Once there was momentum on the move down, it was all over and quite the trade.

Best of probabilities to you.

Dane.

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