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USDCAD D1(Daily) Chart Analysis – Bearish Trend Pattern, Strong Support Zone, Bullish 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 and it looks like this bearish trend pattern has completed itself. While measuring the two waves using the fibonacci expansion tool, we have a strong support zone that has formed based on the 161.8%(1.29545) fibonacci expansion level of the first wave and the 61.8%(1.31337) fibonacci expansion level of the second wave. The price which was moving lower has reached this support zone, respected it, and is bouncing higher from this zone. We also have a bullish divergence that has formed between the first low that has formed on 10th June 2020 and the second low that has formed on 1st September 2020 based on the MACD indicator. 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 is happening, we have the first leg to the upside followed by a pullback. Basically, I am expecting the price to move higher after this pullback in order to create the second leg to the upside. We may now move down to lower timeframe and see if we can find evidences supporting this short-term bullish view.
USDCAD H4(4 Hours) Chart Analysis – Bullish Trend Pattern, Strong Support Zone, Bullish divergence
On the H4 chart the price which was moving higher has created a bullish trend pattern that had completed itself, we may consider this as evidence of bullish pressure. Generally, after a bullish trend pattern, we may expect corrections and then potential continuation higher. Currently, it looks like a correction is happening. We also had a strong resistance zone that had formed which the price has broken above and currently, this strong resistance zone is acting as a strong support zone for us. We also have a bullish divergence that has formed between the first low that has formed on 1st October 2020 and the second low that has formed on 6th October 2020 based on the MACDindicator and CCI indicator. So until the key support zone (marked in red) holds my view remains bullish here and I expect the price to move higher further.
Technical Analysis & Forecast Summary
USDCAD D1(Daily) Chart Analysis
- Bearish Trend Pattern, Strong Support Zone, Bullish divergence
USDCAD H4(4 Hours) Chart Analysis
- Bullish Trend Pattern, Strong Support Zone, Bullish divergence
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