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SWING TRADING: USDCAD - We MUST Be Careful!

today i will show you exactly how you

can be using technical analysis

and order flow to find the best trading

setups in the market

from a swing trading perspective so we

will be taking a pair analyzing it from

a technical and

order flow perspective and by the end of

the video i will show you exactly where

is the best

area to be looking for a potential

trading opportunity

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you in the video

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okay so the pair that i want to speak

about today is

exactly usd cat now if you're asking

yourself why do i want to speak

specifically about this pair because

both

from a trading opportunity standpoint

and an educational standpoint it is an

extremely

interesting pair to follow in fact it is

very near to

providing a very good trading

opportunity and

it will be very interesting to analyze

it so i will be performing a full

analysis on it obviously also checking

the order flow

and by the end of the video you will see

exactly what kind of trading opportunity

we will be

looking on the pair with students so

let's start

the analysis and as usual i will try to

keep it as educational as

possible so that you will understand

exactly what you have to incorporate

in your own trading strategy so let's

start

from the monthly time frame now on the

monthly clearly what we can see

that we had on usd cad we clearly had an

extremely strong

impulse to the upside now after you see

an impulse in the market

if you want informations on the

retracement that is followed that always

follows an impulse what are you supposed

to be doing

you're supposed to take your fibonacci

from the low

to the high of the impulse okay that is

how you

understand what kind of informations you

can take on the retracement taking your

fibonacci on the impulse

and by doing it what we can see we

consider the market retraced

exactly to the 0.786

fibonacci retracement taken on the

impulse now if you're asking yourself

why did the market retrace exactly to

the 0.786 and why

it was actually exactly what we expected

the reason for which the market retraced

exactly at the 0.786

is because it was the fibonacci level

that was

aligning the best with structure

what does it mean it means that it was

creating a confluence of

support with the previous resistance now

turned

support and in fact that is exactly the

level that the market

went to test because it was the

confluence of support

so the market went to grab the liquidity

and the previous resistance turned

support in fact

before starting all this move to the

upside where is the last time

that the market went to the downside

exactly here

so previous resistance turn support in

confluence with the 0.786

is definitely a level that you want to

see the market retrace

too and that is what the market will do

most of the time so okay retrace

to the fibonacci level that is aligning

the best

with structure going down on the weekly

time frame what do we have

now on the weekly time frame we can

clearly see a confirmation

of this structure that we have already

identified from a monthly perspective in

fact

what we can see is that all this zone

here

is an extremely strong support area from

a weekly perspective and it was acting

as very strong

resistance here again resistance here

again resistance here

again resistance at this area the market

broke it to the upside another the

market

is re-testing the level from the upside

all this previous resistance

is turned support in this area and it

has already rejected the market here and

currently the market is testing the zone

again with a bullish pattern in fact

not only the market is testing an

extremely strong support area both from

a monthly and

a weekly perspective but it is testing

it also creating

this m formation and after an

affirmation what do you want to see

you want to see the market reject the

structure to the upside so basically

the market to complete the pattern at

the neckline of the

m formation which is the previous report

now

turned resistance so basically what we

would like to see from a weekly

perspective

is this information to complete with a

move to the upside

that tests the previous support to

resistance which is the completion zone

of the information and rejects the

structure support that we have on the

monthly

and also here on the weekly let's go

down

on the daily time frame and see what we

have from a daily perspective

and then we will check what we have from

an order flow perspective

just a quick reminder make sure you

comment below and let me know which

peer or topic you would like me to cover

or analyze in the next video now on the

daily time frame what we can see

first of all we can clearly see that not

only

this is the neckline this red box here

is the neckline that we have

on the weekly so our target to the

upside but also in the daily

it is a very strong level of structure

in fact here in the daily it is the

previous support here

against report here again support here

again support here and

all the support is now turn resistance

here and we definitely expect the market

also from a daily perspective to make a

move to the upside to test

this level so we want to see also the

daily market to go and grab the

liquidity that this at this level

because it is also the completion zone

of the information that we have

on the weekly now if we are to identify

the structure here in the daily

we can also see another level that we

can't

ignore in fact before we identify our

upside target here there is

one level in the middle between this

strong support that we have on the

monthly and

weekly and this the overall upside

target that we have

which is this resistance here in fact

what we basically have here is a market

that made the move to the downside finds

found support at this level with this

green candle

and this previous report is now turned

resistance

at this level and until we will see a

daily break

above this air above this level we can't

be looking for the continuation to the

upside because

we would be longing at daily resistance

which is never a good idea now let's go

and give a quick check at what we have

from a cot perspective before i show you

how we will be approaching

this situation with students now from a

cot perspective if we check the

data for the cad and by the way if you

don't know what the co2 data is

is the commitment of traders so

basically what the biggest banks and

institutions are currently doing in the

market and how they are

positioned now what we can see from a

cad perspective and by the way

if you check the data for the cad what

you're actually checking is

cad usd because all currencies on the

spot

are traded against the usd so if you

check the data for the cad

you're actually checking cad usd so if

you want information on usd cad

we just check the data for cad usd and

then we reverse

everything and by checking the data on

cad usd

what we can see is that net positions

greatly decreased we went from a

situation

where we had way more lungs than shorts

from an institutional perspective with

74k

lungs and 36 shirts 36k shorts

all the way down to having a negative

net positioning so from an institutional

perspective

having more shorts than lungs with 58k

shorts and 23k

lungs and then net positions clearly

increase now all the way up to minus

16k with 50k shorts and 34k

longs so clearly we have seen first

institutions selling the cad and why why

they were selling because

cat correlates very well with oil and

during the crisis

oil was moving to the downside therefore

clearly institutions were as well

selling the cat and now that the oil is

rallying the card is following as well

and in fact institutions have been

selling usd cad because they have been

buying

cad usb card usd as you can see here net

positions have been increasing

and if institutions and hedge funds are

selling usd cad

usd cad definitely will make the move to

the upside because they have

most of the money in the market

so overall can we expect a move to the

upside yes because in the long term

clearly

the shift has been to the bearish side

of cad usd

therefore to the bullish side of usd cad

so we can expect

usd cad to actually make this move to

the upside however

trading as usual is reactive it is not

predictive

and as we have seen on the daily we are

still below the daily resistance and

on the four hours we still have bearish

for

our structure everything is still

bearish

the market is creating lower lows and

lower highs there's still

nothing that we can do on the pair okay

everything is still

too premature but this doesn't mean that

the market cannot provide a trading

opportunity

that is why all inside of this area okay

no matter how

much to the downside the market will go

if we will see a spike to the downside

it will be even better

because then for the move to the upside

we will have more liquidity and

a better risk to reward so with students

we will be monitoring price action all

inside of this area

waiting on the four hour time frame for

the market to shift from a bearish to a

bullish market and as soon as the market

will shift from a bearish

to a bullish market at that point we

will add usd cad

on watch list and as soon as the market

will provide to us one of our valid

entries

we will be taking a nice long with a

very good risk to reward and

very good probabilities for the move to

the doc for a move to the upside

completion of the weekly information

rejection of the monthly support

the weekly support and the daily support

however

be very careful because at the moment

here we have daily resistance and from

here

we can expect a little bit of

continuation to the downside so we

definitely

have to be careful on the four hours to

wait for a proper

a shift back to a bullish market

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you