USD/CAD Butterfly Harmonic Pattern - Potential Reversal Setup?
The chart focuses on the USD/CAD currency pair and highlights a visible harmonic pattern, along with technical indicators that provide additional signals. The analysis is based on a 4-hour chart, giving insight into short to medium-term trading opportunities.
The visible pattern on this chart is a Butterfly Pattern, which differs from the Gartley pattern by typically signaling a strong reversal at point D, often leading to a sharp corrective move. The chart suggests that point D has been reached, signaling a possible buying opportunity.
Technical Indicators:
The TDIGM indicator suggesting that selling pressure is exausted, and an upward move might be imminent.
Price appears to have found support near point D, indicating that sellers are losing strength, and a bounce may be on the horizon.
Strategies:
1.Short-Term Long Position:
Since point D represents the completion of the Butterfly pattern, it suggests a potential bullish reversal. A buying strategy could be profitable here.
Buy Entry: Near point D (around 1.3435), where the chart shows price stabilizing after the decline.
Stop Loss: Below point D, around 1.3400, to protect against a false support break.
Take Profit: Initial targets can be around 1.3500 and 1.3550, based on previous resistance levels and the expected recovery.
2.Short-Selling on a Breakout:
If the identified support at point D breaks, a selling strategy may be considered.
Sell Entry: Below 1.3400.
Stop Loss: Above 1.3450, in case of a false breakdown.
Take Profit: Targets can be set around 1.3350 and 1.3300, based on previous support levels.
If the Butterfly pattern holds and point D maintains support, we expect an upward move; if price breaks below point D, further declines are likely.
The visible pattern on this chart is a Butterfly Pattern, which differs from the Gartley pattern by typically signaling a strong reversal at point D, often leading to a sharp corrective move. The chart suggests that point D has been reached, signaling a possible buying opportunity.
Technical Indicators:
The TDIGM indicator suggesting that selling pressure is exausted, and an upward move might be imminent.
Price appears to have found support near point D, indicating that sellers are losing strength, and a bounce may be on the horizon.
Strategies:
1.Short-Term Long Position:
Since point D represents the completion of the Butterfly pattern, it suggests a potential bullish reversal. A buying strategy could be profitable here.
Buy Entry: Near point D (around 1.3435), where the chart shows price stabilizing after the decline.
Stop Loss: Below point D, around 1.3400, to protect against a false support break.
Take Profit: Initial targets can be around 1.3500 and 1.3550, based on previous resistance levels and the expected recovery.
2.Short-Selling on a Breakout:
If the identified support at point D breaks, a selling strategy may be considered.
Sell Entry: Below 1.3400.
Stop Loss: Above 1.3450, in case of a false breakdown.
Take Profit: Targets can be set around 1.3350 and 1.3300, based on previous support levels.
If the Butterfly pattern holds and point D maintains support, we expect an upward move; if price breaks below point D, further declines are likely.
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