Hi Traders! Today I share with you my USDCAD short term forecast and technical analysis post, we do our analysis on the MetaTrader4 platform (MT4). Some very interesting, useful tips and hacks about the MT4 platform could be found here. As we do in every technical analysis post we are going to perform the multi-timeframe technical analysis on this pair in order to find possible trading opportunities. 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! Let’s start our analysis now from the highest timeframe which will be the H4 chart here.
On the H4 chart, we have a bearish divergence that has formed between the first high that has formed at 1.38802 and the second high that has formed at 1.38884 based on the MACD indicator. The price then moved lower and broke below the last low at 1.38127 thus forming a classical setup of bearish divergence followed by bearish convergence, we may consider this as evidence of bearish pressure. As per the book scenario after a bearish convergence we may look for pullbacks and then further continuation lower. Currently, it looks like a pullback is happening and in addition to this, the price has created a bearish hidden divergence that has formed between the first high that has formed at 1.38884 and the second high that has formed at 1.38143 based on the MACD indicator which we may consider as yet another evidence of bearish pressure. 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.
On the H1 chart, the price which was 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 the correction that we are looking for is happening. In addition to this, we also have a bearish divergence (supporting the H4 bearish hidden divergence) between the first high that has formed at 1.37819 and the second high that has formed at 1.38143 based on the MACD indicator which we may consider as another evidence of bearish pressure. Also, we had two strong support zones that has formed and the price which was moving lower has broken below these zones and is holding below them. Currently, these strong support zones are acting as strong resistance zones for us. Until these two strong resistance zones (marked in red) shown in the image below hold my short term view remains bearish here and I expect the price to move lower further.
USDCAD H4(4 Hours) Chart Analysis
USDCAD H1(1 Hour) Chart Analysis
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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Happy Trading!
Arvinth Akash
Home Trader Club Team.
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