A Possible Double Bottom for USD/CAD

Despite the range in the past few days the USD/CAD pair formed a few very good intraday movements that can be seen on the four-hour time frame, and which had excellent entry and exit points.

Today the pair did the same – it formed an excellent signal for a movement to the downside with the doji candlestick at 1.31210. The drop continued, as I expected, until the pair reached the lower band of the Bollinger Bands indicator at 1.30047 while at the same time USD/CAD also formed a double bottom.

Of course, anyone who knows the BB indicator knows that it is not the holy grail of trading, but we should still be careful when a pair reaches these zones of support and resistance. Fortunately, I know this indicator well and I know how the price behaves when it reaches these zones, which allowed me to close my short positions at maximum profit.

What will follow next? There is less than an hour until the most recent candlestick closes on the four-hour time frame and, of course, it remains to be seen how it will do so.

There are five more hours until the end of the American session, and from its very beginning today the American traders started buying very aggressively, which gave the bulls a lot of strength. If the four-hour time frame candlestick closes as it is now I will be considering opening long positions with target 1.33000 very seriously.