text: Tighten S-T USDCAD Rebound Risk Following Further Gains | RJO Futures
  Tighten S-T USDCAD Rebound Risk Following Further Gains
  Posted 08/07/2017 8:21AM CT | RJO Market Insights
  Fri and overnight's continued recovery above Thur's 1.2620 high reaffirms the suspected corrective rebound introduced in 28-Jul's Trading Strategies Blog following 27-Jul's bullish divergence in short-term momentum. This latest spate of strength leaves Thur's 1.2552 low in its wake as the latest smaller-degree corrective low the market now should be expected to sustain gains above to maintain a more immediate bullish count. Its failure to do so will not only break the intermediate-term uptrend, but also render the recovery from 26-Jul's 1.2414 low the 3-wave and thus corrective affair we suspect it is ahead of a resumption of the major downtrend to new lows below 1.2414. In this regard we are considering 1.2550 our new short-term risk parameter from which shorter-term traders with tight risk profiles can rebase and manage the risk of non-bearish decisions like short-covers and cautious bullish punts.
  It's debatable whether the current rebound is of a sufficient scale to conclude 26-Jul's 1.2414 low as the END of the broader decline from 05-May's 1.3794 high. However, the combination of:
  the market's rejection thus far of 2016's 1.2460 major low
  return to historically bullish sentiment accorded the CAD futures and
  Fibonacci fact that the decline from May's 1.3794 high is exactly 0.618-times (i.e. 0.618 progression) the length of early-2016's 1.4691 – 1.2460-decline
  is a compelling one that warns us to beware a larger-degree correction or reversal until the market stems the rebound with a confirmed bearish divergence in short-term mo below a level like 1.2550.
  These issues considered, shorter-term traders are advised to maintain a cautious bullish stance from 1.2475 OB recommended in 28-Jul's Trading Strategies Blog and trail protective sell-stops to 1.2550. Longer-term players are advised to pare bearish exposure to more conservative levels with further gains above 1.2945 required to jettison the position altogether. A relapse below 1.2550 is required to stem the rebound and resurrect our longer-term bearish count to new lows below 1.2414.