USD/CAD - Waiting for a Range Breakout
USD/CAD is currently stuck in a 120 pip range (on the H4 time frame), and has been for the last month.
Seasonality would suggested that the USD should weaken (leading to a drop in USD/CAD ) in late July/early August, and begin a bearish period until October. However, we're currently seeing a strong bullish divergence momentum phase. This is significant as we can identify two fairly recent ranges that broke higher (February & April 2019) on bullish divergence .
The bottom line is that we have contradictory signals, which means that a prudent trader should stay on the sidelines until a clear breakout develops.
I've identified two target levels for both longs and shorts, depending on how the range breakout occurs. But I won't be entering a trade until a clear, and strong, break of the range boundaries occurs.
Let me know if you have any queries.
DD
Seasonality would suggested that the USD should weaken (leading to a drop in USD/CAD ) in late July/early August, and begin a bearish period until October. However, we're currently seeing a strong bullish divergence momentum phase. This is significant as we can identify two fairly recent ranges that broke higher (February & April 2019) on bullish divergence .
The bottom line is that we have contradictory signals, which means that a prudent trader should stay on the sidelines until a clear breakout develops.
I've identified two target levels for both longs and shorts, depending on how the range breakout occurs. But I won't be entering a trade until a clear, and strong, break of the range boundaries occurs.
Let me know if you have any queries.
DD
Note
UC is currently breaking the upper boundary of the range. I'm waiting for a H4 close (30mins time for my timezone) to determine if it's a false break or not. Even then, I'll scale in to the entry.Note
It's a bit of a worry that UC dropped quickly after breaking that range. There's also the possibility of a momentum divergence on a H1 timeframe. Signals from lower time frames than my trading one (so lower than H4) aren't conclusive for me... But they are a factor in my decision making. See this screenshot: 
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