USD/CAD: Trading The Move Higher

On Nov. 3, 2021, I posted to social media: “USD/CAD can still push higher as long as price stays above 1.2351. Will be looking for buying opportunities.“

Confluence trading is a combination of two or more trading strategies/techniques that come together and form a high probability buy/sell zone in a certain area in the market.

Market patterns (Elliott Waves, harmonic, candlestick patterns, etc.), price action analysis (support & resistance, supply & demand zones, Fibonacci retracements, etc.), and indicators (RSI, moving average, stochastic, etc.) are technical strategies/techniques used when trading a confluence setup. The charts below illustrate a confluence trade setup that signals to traders about which side to take for the trade.

USD/CAD One-Hour Chart for Nov. 3, 2021

Buy Trade Setup

1. A bullish harmonic pattern triggered a buy signal at the 0.50% Fib. retracement level (light blue).
2. Price entered the Support/Resistance Zone (dark blue).
3. Dynamic support for the 200-MA (black).
4. RSI bullish trend continuation divergence present (pink).
5. Stochastic (oversold).

I entered the buy trade at the 1.2381 level with a Stop Loss at 1.2351, targets at the 1:1.5 RR minimum, and a full target at the 1:3 RR. The USD/CAD pair moved higher, and on Nov. 4, 2021, the price hit the 1:3 RR target at 1.2471 from 1.2381 for +90 pips (+3% gain and risking 1% on every trade).

USD/CAD One-Hour Chart for Nov. 4, 2021

Like any strategy, there will be times when the method fails, so proper money/risk management should always be used on every trade.