Last week’s candle on USD/CAD has ended with an engulfing candlestick pattern.
This weekly candlestick is red from the beginning to the end.
After the price compressed vertically and took all the buyer’s orders on the way up. It dropped back to the origin of the compression.
This drop created last week’s candlestick which engulfed the previous 12 candlesticks.
However, the price still does not break the uptrend support line on the weekly chart.
Still, we are unable to say that the momentum has changed. If the price does break the uptrend support line, then we can say that the long term momentum has changed from bullish to bearish.
In this case, I’ll wait for the price to retrace the supply above and sell there. If the price does not break the uptrend support line, then the supply above will be too risky for sell position since the momentum remains bullish.
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