Hi Traders! USDCAD short term forecast update and follow up is here. On July 28th I shared this “Technical Analysis – USDCAD 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 Traders Academy Club. Spoiler alert – free memberships are available!

My Idea

On the H1 chart, based on the Heikin Ashi candles we can see that currently, we have strong bearish bodies here as well in downward moving market conditions so it basically reflects a bearish environment. Until this condition changes my view remains bearish here. In addition to this, 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 flat correction is happening in the form of a range. So based on all this my view here is bearish and I expect the price to move lower further in the short term.

USDCAD H1(1 Hour) Chart Current Scenario

On the H1 chart, my view was bearish and I was expecting the price to move lower further. The price action followed my analysis exactly as I expected it to here. The price which was moving higher reached the top of the range, respected it and bounced lower. The price then moved lower further as I expected it to and delivered 180+ pips move until it was blocked by a bullish divergence.
On the M15 chart the market provided us with various facts supporting the bearish view. The price which was moving higher reached the top of the range and we had a bearish divergence between the first high that has formed at 1.26018 and the second high that has formed at 1.26025 based on the MACD indicator. The price then moved lower and broke below the last low at 1.25521. The price then moved lower further and broke below the bottom of the range and retested this breakout. We may consider these as facts provided by the market supporting the bearish view and also there we no signs opposing 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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