Hi Traders! Today I share with you my USDCAD short term forecast and technical analysis 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 – Strong Resistance Zone, Bearish Convergence, ADX Indicator
On the daily chart, we have a strong resistance zone that has formed and the price which is moving higher reached this zone, respected it and bounced lower from this zone. Also, we have a bearish divergence that has formed between the first high that has formed at 1.36399 and the second high that has formed at 1.36941 based on the MACD indicator. The price then moved lower and broke below the last low at 1.34891 thus forming a classical setup of bearish divergence followed by bearish convergence, we may consider this as evidence of bearish pressure. As per the book scenario after a bearish convergence we may expect corrections and then further continuation lower. Currently it looks like a correction is happening. 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 another 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 short term bearish view.
USDCAD H1(1 Hour) Chart Analysis – Bearish Trend Pattern, Stochastic Oscillator, Two Strong Resistance Zones
On the H1 chart, the price which is 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 a correction is happening and also based on the Stochastic Oscillator we could see that the price has reached it’s extreme which we may consider as another evidence of bearish pressure. In addition to this, currently there are no signs opposing this short term bearish view. Also, we had two strong support zones that has formed and the price which is moving lower has broken below these zones and is holding below them, we may consider this as yet another evidence of bearish pressure. Currently, these strong support zones are acting as strong resistance zones for us. Until these two strong resistance zones (marked in red) shown in the image below hold my short term view remains bearish here and I expect the price to move lower further.
Technical Analysis & Forecast Summary
USDCAD D1(Daily) Chart Analysis
- Strong Resistance Zone, Bearish Convergence, ADX Indicator
USDCAD H1(1 Hour) Chart Analysis
- Bearish Trend Pattern, Stochastic Oscillator, Two Strong Resistance Zones
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.
