Break, test and run lower
The USDCAD broke out of its two day box, that had a ceiling against a large swatch of swing levels (going back to April), and a floor near the 100/200 hour MAs. The pair broke below the MAs below (see earlier post outlining the trade). Then retested the break level, before falling even lower... As mentioned in the post:
Play the ranges for now, with stops (and reversals) on the breaks. Then hope for a momentum move in the direction of the break as traders hop on the change in the picture/technicals.
That is exactly what we experienced on the break.
What now? Take profit? Hope for more of a downward run?
In this trading environment if you are lucky enough to let's say sell near the high extreme or even on the break outside the box, trading profit is nice. Although the comments from Washington are back on the "bright side of life" variety (no auto tariffs, getting rid of steel and aluminum tariffs, going back to China), the dark side can also pop up.
Anyway, the stall at the ceiling and break of the floor, is a tilt back to the bearish side with 1.3422 (61.8%) and 1.3405 (a couple of swing lows) are the next targets. Then the lows from May 1 and May 10 at 1.3376-1.33815 become the month low targets.