USDCAD, Daily Chart, 270213 : Bearish Trade Setup

usdcad_daily_270213

Pair is on a Strong UPTREND on Monthly, Weekly and Daily Charts, but on the Daily Chart we just noticed a big Bearish Correction starting and it looks like it will pull the pair down to parity levels where there is STRONG SUPPORT and Fibonacci 61.8 confluence. We had a valid reversal Candlestick in the shape of Spinning-Top/Cross-Doji yesterday, which signaled a reversal confirmed today by a big Bearish Candlestick. If we are conservative, we’ll wait to enter SHORT at the open of the next candlestick. Otherwise, we can enter @1.0230 placing our STOP-LOSS a few pips above DOJI’s top @1.0307 (risking 77pips).  How big this Correction is going to be before the pair resumes its Bullish Course? Well, Stochastics show that pair is at OVERBOUGHT LEVELS and just formed a REGULAR BEARISH DIVERGENCE with price action because price moved to Higher High while Stochastics moved to Lower High. Therefore the move downwards will be strong enough to at least reach Fib 50.0 but Fib 61.8 looks more possible.  We can therefore place our TAKE-PROFIT/EXIT Point [email protected]  going for a total profit of  227pips. Since we’re risking 77pips, our Risk/Reward Ratio is 1:3 which is fine.