A Falling Star And A Hanging Man – This Powerful Bar Combination Is A Signal For A USD/CAD Trend Reversal From A Bullish Into Bearish One

That exact bar combination appeared on the monthly time frame of the USD/CAD pair and it has formed right below the strong resistance at 1.2990 – 1.3000 (marked by the middle line of the Bollinger Bands indicator).

We can expect quite confidently that a bearish trend is about to begin and it is possible for it to last several months (every signal is supposed to be traded on the time frame it appeared, and the longer term that time frame is, the longer term that movement will be).

On the W1 time frame the pair is developing in a consolidation channel with about 800 pips width and it appears that it is time for the subwave C from the correction to the downside (in green) to begin.

On the D1 time frame there is a barbed wire pattern of seven bars that have already closed below the resistance at 1.2290, which confirms that expectation.

I think the first long term target is around 1.2650 and after the pair overcomes that support we can expect another depreciation to the lower band of the Bollinger Bands indicator on the monthly time frame.