Before Wednesday’s FOMC statement, USDCAD started showing supply signs above a strong zone. On the FOMC’s statement release, there was a rally, but the prices quickly tumbled, forming what we call an ‘upthrust’, on very high volume. This is what we know to be of a good breakout sign, and breakouts can be traded when it occurs.
The trade was closed after a VSA demand signal from H4, with a narrow range bar behind already showing demand coming in the market.
Right now, the market is approaching the previous zone at 1.315, and we can see VSA showing further supply, with the background still being weak. If the line drawn at 1.311 is broken (which coincides with the latest low), it’s a good confirmation to short the market. As of now, the market is rallying, and it will still have to prove the recent supply is enough to start a major turn. Other way to confirm it, is to wait for the dynamic trend to turn down.
USDCAD Trading Breakout
The Pound has been showing strength in the volumes lately, on the major pairs, with congestions showing a demand zone being formed at these prices.
GBPUSD
In GBPUSD the prices just bounced off the demand zone, which were the first long signal, due to the strength behind. The target is at 1.326, from where a breakout can be traded on a lower timeframe. Alternatively, if there is a correction onto 1.319 on low volume, there can be another long opportunity.
EURGBP
EURGBP is showing some selling behind, which is good for the GBP. A trendline break would give a trend changing confirmation, for a short trade.
VSA + Congestions EURGBP
GBPJPY
GBPJPY is ranging for a longer time than GBPUSD, and didn’t go down as much as GBPUSD did recently. There is buying behind showed by VSA and congestion bars, along with a strong congestion zone. The plan is to look for a trendline break.
