Looking like a downward choice for the Loonie.

Good Morning Dynamic traders

Hope you are all well and are having fun on the markets. Remember keep trading fun!!

I left you yesterday pondering over the things we should be keeping an eye out for to help let us know which way the Loonie has decided to go. I pretty much gave you some of the answers through my clues, but lucky enough the Loonie has shown us some of the signs that I was referring to.

In the 4 hour chart below you will see that price dropped below the support line and then it started to oscillate. This is why I asked what should we be looking for, one of the things we should have been looking for was a reversal candlestick, which I have marked on the chart below. This candlestick tells us that price hasn’t reversed yet and is still enjoying the downtrend. There are also a couple of other factors present on the chart. You will notice that the reversal candlestick is also at a support area, which is another reason why price failed to reverse.
If price had reversed and started to climb, I personally would be waiting for a BOB above the support line, because (and hopefully you saw it yesterday) we had another reversal candlestick formation, but instead price failed at the support line and gave us the reversal candlestick I mentioned in the paragraph above.













In the hour chart below you can see that we have the reversal candlestick. You will also notice that the MACD was showing us a sell signal. This signal along with both reversal candlesticks from the hour and 4 hour charts strengthen the fact that price hasn’t finished falling yet.
However we still have convergence from the MACD, so how far will price fall??














Happy Trading

Richard Monnery