Hi Traders! Today I share with you my USDCAD technical analysis and short term forecast post, we do our analysis on the MetaTrader4 platform (MT4). Some very interesting, useful tips and hacks about the MT4 platform could be found here. As we do in every technical analysis post we are going to perform the multi-timeframe technical analysis on this pair in order to find possible trading opportunities. If you would like to learn more about the way we trade and the technical analysis we use then check out the Home Trader Club Spoiler alert – free memberships are available! Let’s start our analysis now from the highest timeframe which will be the daily chart here.
USDCAD D1(Daily) Chart Analysis – Bearish Trend Pattern, Key Resistance Zone, Bearish Divergence
On the daily chart, the price which was moving lower has created a bearish trend pattern in the form of three lower highs, lower lows which we may consider as evidence of bearish pressure. Generally, after a bearish trend pattern we may expect corrections and then further continuation lower. Currently, it looks like the correction that we are looking for has happened. In addition to this, the price which is moving higher has reached a key resistance zone formed by the 50%(1.35370) – 61.8%(1.36222) Fibonacci retracement levels of bearish trend pattern, the price respected this zone and is bouncing lower from it. Also, we have a bearish divergence that has formed between the first high formed at 1.35409 and the second high formed at 1.36042 based on the MACD indicator which we may consider as evidence of bearish pressure. Also, there are no signs opposing this short term bearish view at the moment. So everything looks good here for the bears and we may now move down to lower timeframe and look for evidences supporting this short term bearish view.
USDCAD H1(1 Hour) Chart Analysis – Strong Resistance Zone, Heikin Ashi Candles, Lower Lows, ADX Indicator
On the H1 chart, the price which was moving higher has reached a strong resistance zone, respected it and bounced lower from this zone. Currently, we have a strong bearish momentum and based on the Heikin Ashi candles we can see that, we have strong bearish bodies in downward-moving market conditions so it basically reflects a bearish environment. In addition to this, the price has also created lower lows based on the MACD indicator, which is another sign of gaining momentum toward the bearish side. Also, the ADX indicator gave a bearish signal here at the cross of -DI (red line) versus +DI (green line) and the main signal line (silver line) reads value over 25 which we may consider as yet another evidence of bearish pressure. So the bottom line here is that, everything looks good here as well for the bears and I expect the price to move lower further in the short term after pullbacks until the strong resistance zone (marked in red) shown in the image below holds.
Technical Analysis & Forecast Summary
USDCAD D1(Daily) Chart Analysis
- Bearish Trend Pattern, Key Resistance Zone, Bearish Divergence
USDCAD H1(1 Hour) Chart Analysis
- Strong Resistance Zone, Heikin Ashi Candles, Lower Lows, ADX Indicator
Trading Tips
It is always recommended to look for confirmations before you jump into any trade. If you are not sure about how to trade this short-term sell setup then you can use any setup and strategy that you have in your arsenal to look for bearish moves and join this sell trade.
Also, don’t forget to protect your sell trade using a stop loss and make sure to set a target and keep a proper risk/reward ratio.
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Happy Trading!
Arvinth Akash
Home Trader Club Team.
