Trapped Traders®: Buying USD/CAD

There is a new opportunity for trapped traders in the Canadian dollar. The trap we’re going to look at today is what I refer to as a trap break pullback, which occurred in this area here. These traps present themselves when traders at the hard right edge are trading historical levels of support and resistance – in this case, resistance – several times and it looks as if when price touches that level again that it’s going to work and sell off as it had done historically.

However, as you can see, this is not the case and price has moved strongly through that level, trapping those traders short. If you get a pullback in price, this looks like a pretty good place to get long to have an advantage over those trapped traders.

Source: Forex Traders Daily