Repost from Instagram 9.5.18
Below you can find the reasons why structure needed to move in the following way to see a continuation of USDCAD’s bullish momentum👇
1. Break out of the short term descending trend (Giving us indication this short term bullish momentum is continuing)
2. Validate short term higher highs have been made (Indicating to us that this bullish momentum is continuing, short term)
3. Show signs of short term liquidation + create a momentum retest (short term retest) Indicating to us A) a short term H/L has been made validating trend continuation & B) continuation of this short term bullish momentum is becoming more confirmed
4. Retest the previous broken descending trend or level (daily resistance) closing above (Confirming to us market momentum should push in the direction that we seek, bullish)
5. Our end target area for this trade setup was to the daily resistance due to the reasons down below 👇
5a. Markets momentum (bullish) is in a state of liquidation due to the initial impulse (bearish) as well as structures daily momentum is bearish therefore risk is warranted as moderate/higher
5b. Structure just previously broke out of the descending trend which doesn’t completely validate a bullish trend as another trend cycle is needed to form to confirm to us that the bearish momentum is in fact invalid
5c. Structures bullish push was warranted as short term since higher highs haven’t been made within structure, only short term higher highs. With this, we could simply be receiving a structural retest for further continuation down.
5d. Our end target was the daily resistance (1.31669) since price has shown difficulty on numerous occasions to break above this handle indicating that pending orders from the sellers are causing for rejections. Structure hasn’t created higher highs yet within its entire environment, only short term. Therefore, we would concluded that the most optimal area to close would be at the weekly resistance and if price surges through, we will take the continuation of that impulse or if price rejects, we will simply reassess.
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