The last three sessions for USD/CAD were bearish and the pair dropped by 180 pips. Although the situation has not changed so far and the chart still oscillates around a significant support of 1.28850, reaching this zone may result in a slight correction – from 40 to 70 pips.
Looking at the slightly less distant interval – H4 we can see that support 1.28850 responded classically by stopping the price before further declines. If equally classically after the response to the support zone the chart will want to make a correction of the recent declines from this place – then it becomes the best place for long positions. Such movement would have to take place from the price range (accumulation) 1.29100 – 1.28990, then TP1 for long positions would be 1.29450 (40 pips) and TP2 – 1.29750 (70 pips). The Stop Loss defensive position would have to be under 1.28850 (20/25 pips). The profit/risk ratio would then be 2:1 / 3.2:1.
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Only a breakthrough of the support zone from higher intervals (1.28850) would negate the scenario for today’s possibility of correction and at the same time for today’s setup. Going below the level of the last bulls line of bulls would result in a further drop to the target levels at 1.28150, i.e. the next support from the perspective of the D1 interval. Such a 70 pip descent is also a good earning opportunity, so it is also worth observing the level of current support. If you want to bet on dropping further south, the stop loss for a short position must be no more than 20 pips from the moment the support is finally broken. The profit-risk ratio would then be 3:1.