Hi Traders! USDCAD short term forecast follow up and update is here. On October 5th I shared this “USDCAD Short Term Forecast And Technical Analysis” 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 Traders Academy Club. Spoiler alert – free memberships are available!
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.
USDCAD H4(4 Hours) Chart Current Scenario
In this pair, based on the above-mentioned analysis my short term view was bearish and I expected the price to move lower further towards the strong support zone after pullbacks. The price action followed my analysis exactly as I expected it to here, the pullback that I was looking for happened and then the price moved lower further delivering 200+ pips move so far. The market provided with various facts supporting the bearish view here, the price after bouncing from the top of the range created a bearish trend pattern in the form of three lower highs, lower lows which we may consider as a fact provided by the market supporting the bearish view. Generally after a bearish trend pattern we may expect pullback and then further continuation lower. The pullback happened and then the price moved lower further as per the plan and has currently reached the strong support zone.
Also on the M15 chart, after the H4 chart pullback, we had a breakout of the most recent uptrend line, which we may consider as a fact provided by the market supporting the bearish view. After the breakout we had a correction but the price was holding below the last high and also there were no signs against this bearish view. Then as you can see in the image below how the price moved lower further and provided a wonderful move to the downside.
As traders we always have two choices, the first one is to fall in love with our analysis and try to convince the market and expect the price to move in the direction as per our wish. The second one is to follow the facts that the market provides us and make the right actions according to that. As you know the first option won’t help us and as you can see in the example above what happened when we followed the facts that the market hinted us and took the right action according to that.
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