Technical Analysis – USDCAD Forecast

Hi Traders! USDCAD forecast and technical analysis post is here. We do our analysis on the MetaTrader4 platform (MT4). Some very interesting, useful tips and hacks about the MT4 platform could be found here. If you would like to learn more about the way we trade and the technical analysis we use then check out the Traders Academy Club Spoiler alert – free memberships are available! Let’s start our analysis from the highest timeframe which will be the weekly chart here.

USDCAD W1(Weekly) Chart Analysis – Key Resistance Zone, Stochastic Oscillator

On the weekly chart, after the strong bearish move, currently it looks like a correction is happening in the form of double wave to the upside. Also, we had a strong support zone which the price has broken below and after the breakout this strong support zone is acting as a strong resistance zone for us. In addition to this, while measuring the first wave of this correction using the Fibonacci expansion tool we could see that 61.8%(1.28828) Fibonacci expansion level of the first wave coincides with the strong resistance zone which makes this area a key resistance zone for us. The price which was moving higher reached this key resistance zone, respected it and is currently bouncing lower from this zone. In addition to this, based on the Stochastic Oscillator we could see that the price has reached its extreme which we may consider as evidence of bearish pressure. So everything looks good here for the bears and we may now move down to lower timeframe and look for evidences supporting this bearish view.

 

USDCAD H4(4 Hours) Chart Analysis –  Bearish Convergence, ADX Indicator, Heikin Ashi Candles

Looking at the H4 chart, we could see that the price which was moving higher has created a bearish divergence between the first high that has formed at 1.28361 and the second high that has formed at 1.28536 based on the MACD indicator. The price then moved lower and broke below the last low at 1.27127 creating lower lows, thus forming a classical setup of bearish divergence followed by bearish convergence, we may consider these as evidences of bearish pressure. Generally, after a bearish convergence we may look for corrections and then further continuation lower. In addition to this, 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. Also, based on the Heikin Ashi candles we can see that currently, we have strong bearish bodies in downward moving market conditions so it basically reflects a bearish environment. So based on all this, until the key resistance zone shown in the image below (marked in red) holds I expect the price to move lower further after pullbacks.

Technical Analysis & Forecast Summary

USDCAD W1(Weekly) Chart Analysis 

• Key Resistance Zone, Stochastic Oscillator

USDCAD H4(4 Hours) Chart Analysis

• Bearish Convergence, ADX Indicator, Heikin Ashi Candles

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 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.

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Arvinth Akash
Traders Academy Club Team