Price heading towards the monthly zone for another test
AUDCAD
Price has been testing an M S&R zone in the past for two times. After the second test, price dropped down to more significant (weekly) S&R to accumulate more firepower for probably another test. More recently price has broken trough important W S&R zone, using the base+middle line as strong support for an upwards move. We also have a fairly strong supporting trendline backing us up.
The trade:
Last week, price was slowing down at our D1 horizontal/trendline crossing. This would have been an excellent starting point for a trade! However, we're a tad bit late. We can still get in if we'd get a decent retracement which is quite possible since it might still react from the upper trendline - this could even affect the retrace even more and straight back to the horizontal S&R line. I took a smaller retrace which balances between getting into the trade and getting a better RR/ratio.
Our stop loss is below supporting trendline, backed up with horizontal S&R. TP1 is at the bottom of our M S&R zone at more than 2:1 odds. TP2 is at the top at over 4:1 odds.
Price has been testing an M S&R zone in the past for two times. After the second test, price dropped down to more significant (weekly) S&R to accumulate more firepower for probably another test. More recently price has broken trough important W S&R zone, using the base+middle line as strong support for an upwards move. We also have a fairly strong supporting trendline backing us up.
The trade:
Last week, price was slowing down at our D1 horizontal/trendline crossing. This would have been an excellent starting point for a trade! However, we're a tad bit late. We can still get in if we'd get a decent retracement which is quite possible since it might still react from the upper trendline - this could even affect the retrace even more and straight back to the horizontal S&R line. I took a smaller retrace which balances between getting into the trade and getting a better RR/ratio.
Our stop loss is below supporting trendline, backed up with horizontal S&R. TP1 is at the bottom of our M S&R zone at more than 2:1 odds. TP2 is at the top at over 4:1 odds.