Hi Traders! USDCAD short term forecast follow-up and update is here. On December 15th I shared this “USDCAD Technical Analysis And Short Term Forecast” post in our blog. In this post, let’s do a recap of this setup and see how it has developed now. 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!
My Idea
On the H1 chart, the price has created a bullish trend pattern here as well in the form of three higher highs, and higher lows, 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 flat correction is happening in the form of a range. This range is formed by the highs and lows reaching parallel support and resistance zones. The price which is moving inside this range has reached the bottom of this range, respected it, and bounced higher from this zone. In addition to this, the ADX indicator gave a bullish signal here at the cross of +DI (green line) versus -DI (red line) and the main signal line (silver line) reads value over 25, we may consider this as yet another evidence of bullish pressure. Also, there are no signs of trend change at the moment. Until the key support zone shown in the image below (marked in green) holds my short-term view remains bullish here. A valid breakout above the top of the range would be the validation for this short-term bullish view, we may then expect the price to move higher further.
USDCAD H1(! Hour) Chart Current Scenario
In this pair based on the above-mentioned analysis, my short term view was bullish and I was expecting the price to move higher further. Also, I mentioned that “A valid breakout above the top of the range would be the validation for this bullish view”. The validation for the bullish view which is a valid breakout above the top of the range happened here as per the plan. We then had a small pullback and then the price moved higher further and delivered around 100 pips move. We then had a deeper pullback with the price reaching the key support zone, respected it and bounced higher from this zone delivering 200+ pips move!
So traders, when it comes to trading, there are various important factors that we need to pay attention to, just because we have a good setup doesn’t mean that we can enter the trade randomly and it will pay us huge profits. First of all, we need to validate the entry and we should have a perfect entry plan to get into the trade which is a key factor when it comes to trading. This USDCAD short-term forecast is yet another good example of this scenario.
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Happy Trading!
Arvinth Akash
Home Trader Club Team.
