It is a bit surprising to be calling out on a USDCAD short especially with the strength of the U.S. Dollar. However, it is rather safe to be playing the bearish channel breakout on this pair, here's why.
After a rather intense sell-off, the price rallied for a bit. This is actually more apparent on the lower time frames. However, the price seems to be going for another round of sell-off. As of right now, the price broke down the consolidation channel. The bias is towards this break-out will work based on the size and magnitude. The break-out was very strong so chances are it will hold.
The reward to risk ratio is also quite high. Price is capable of potentially retracing to the trend-line. The reward is upwards 300 pips while the downside is less than 50 pips depending on how much tolerance you want to take. Make sure to give enough leeway for this trade to play out. Keep in mind that the price may re-enter the channel and test the trend-line support and resistance level. That trend-line is crucial for defining the stop loss level. Recommendation is sell because of the huge upside.
