Hi Traders! USDCAD short term forecast and technical analysis 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. The way I would like to analyze the chart for setups is based on multi-timeframe confirmations because in my POV if we get more evidences on different timeframes for the same direction then it makes the setup much more reliable. 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 daily chart here.
USDCAD D1(Daily) Chart Analysis – Strong Resistance Zone, Bearish Divergence, Parabolic Sar
On the daily chart, the price which was moving higher reached a strong resistance zone, respected it and bounced lower from this zone. Also, we had a bearish divergence that has formed between the first high that has formed on 19th July 2021 and the second high that has formed on 20th August 2021 based on the MACD indicator which we may consider as evidence of bearish pressure. Currently, it looks like a correction is happening, we have the first leg down followed by a pullback and it looks like the second leg is developing now. Looking at the Parabolic Sar we could see that the dots are above the price which we may consider as another evidence of bearish pressure and also, there are currently no signs opposing this short term bearish view. So everything looks good here for the bears and we may now move down to one timeframe lower and look for evidences supporting this short term bearish view.
USDCAD H4(4 Hours) Chart Analysis – Range, Parabolic Sar, Strong Support Zone
On the H4 chart, the price is currently moving inside a range. This range is formed by the highs and lows reaching parallel support and resistance zones. The price which is respecting this range so far has reached the top of it, respected it and is bouncing lower. The price has currently reached the middle of this range and the price still has room lower towards the strong support zone where the bottom of this range coincides. In addition to this, based on the Parabolic Sar we could see that the dots are above the price here as well which we may consider as another evidence of bearish pressure. So based on all this, my short term view remains bearish here and I expect the price to move lower further towards the strong support zone after pullbacks.
Technical Analysis & Forecast Summary
USDCAD D1(Daily) Chart Analysis
Strong Resistance Zone, Bearish Divergence, Parabolic Sar
USDCAD H4(4 Hours) Chart Analysis
- Range, Parabolic Sar, Strong Support Zone
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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To your success,
Vladimir Ribakov
Certified Financial Technician
