Dear Trader and Clickevents reader
The holiday season turmoil caused many of us to change plans and patiently accept that this was to be a very different year.
For me, it wasn't just adjusting to Covid rules but also the weather. A sailing trip which should have taken in Plymouth had to be cut short, with what turned out to be a very pleasant, but storm bound week, in Brixham enjoying the local brew and cream teas, etc..
Patience
That old proverb: "Patience is a virtue" could be about to work to the advantage of USDCAD traders who have been patiently waiting for a reversal to develop.
Dating from way back in the fourth or fifth century, the proverb has served those who understand it's simple message very well.
Patience is usually in short supply in the 'gun slinging' trading community and those traders who don't discover its virtues find it can be quite a short career!
Canadian dollar
My last newsletter in early August featured the Canadian dollar and its linkage with the price of oil. If all other influences remain static: Oil up, Canadian dollar up, US dollar down, and vice versa.
Throughout August oil just kept rallying up and up, reaching its peak on the last day of the month. And then it collapsed by seven dollars, a 16% tumble.
Over to the USDCAD chartand we should expect to see a similar move if the linkage, the correlation, is working. August saw the US dollar falling against the Canadian as oil rose.
Technically, it was in a mature fifth down wave coming into a support zone and ready for a trend reversal..... (all explained in the Great Reversals course and the twice weekly TC videos).
Right on cue, at the start of trading the very next day, 1st September, as the oil price peaked, so did the Canadian dollar against the US dollar.
What's happening now?
It's a potential reversal, possibly a major one, but for now it has formed an inverse Head and Shoulder pattern.
If price action today should close above the blue neckline it could run through more than 200 pips worth $2,000 trading just one contract. Traders Class video update members are already in on the action!
If you missed the previous, early August, newsletterwhich explained why we were expecting a reversal, just request it by hitting 'reply'.
Best regards.
