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USDCAD H4(4 Hours) Chart Analysis – Bearish Trend Pattern, Bearish Convergence, Uptrend Line Breakout, Important Support Zone, Parabolic Sar, ADX Indicator
Looking at the H4 chart we could that the price which is moving lower has created a bearish trend pattern in the form of three lower highs, lower lows. Generally, after a bearish trend pattern, we may expect corrections and then further continuation lower. The correction happened in the form of a double wave to the upside, we had a false break with the bearish divergence that has formed between the first high that has formed at 1.36307 and the second high that has formed at 1.36453 based on the histogram of the MACD indicator. The price then moved lower and broke below the last low at 1.35356 thus creating a bearish convergence for us. Generally, after a bearish convergence, we may expect pullbacks and then further continuation lower, the pullback that we were looking for happened and then the price is currently moving lower. In addition to this, the price has also broken below the most recent uptrend line and currently, it has also broken below an important support zone, we may consider these as evidences of bearish pressure. Based on the Parabolic Sar we could see that the dots are above the price which we may consider as another evidence of bearish pressure. Also, the ADX indicator gave a bearish signal at the cross of -DI (red line) versus +DI (green line) and the main signal line (silver line) reads value over 25, we may consider this as yet another evidence of bearish pressure. So based on all this, my view is bearish here and I expect the price to continue lower further in the short term.
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