This one is a little different than the channel breakouts I usually trade. The USD/CAD has been trending up (weakening) for the last few weeks since the big mid-March drop. You can see the baseline (green line) up trend and the steep line (blue line) up trend taking off away from it. You can also see the 800 sma (purple line) tracking the current prices. Now, no one knows with certainty what any currency pair will do (or any traded equity, commodity or contract), but we can make generalities. If this pair falls down and closes through its 800 sma and the blue steep trend line it is a sell trade for me and I'd look for the pair to fall all the way to the green base line. There is no buy side here, only a sell side. I'd place the stop at 1.2725 or so and move to break even if the pair closes below 1.2550. I'll probably put a trailing stop on it after that (it's just my way), but I'll try to give it enough room to make it down to the 1.2300 level or so. Below is a chart showing the set up.
Happy Trading!
