Hi Traders! USDCAD technical analysis and short term forecast post is 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. We do our analysis on the MetaTrader4 platform (MT4), some very interesting, useful tips and hacks about the MT4 platform could be found here. 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! Now, let’s start our analysis from the highest timeframe which will be the H4 chart here.
On the H4 chart, the price has created a bullish trend pattern 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 correction is happening. So basically, I expect the price to move higher further after this correction. In addition to this, we could see that the price which was moving higher has created higher highs based on the MACD indicator, which is a sign of gaining momentum towards the bullish side. Also, there are no signs opposing this bullish view. Also, we have a key support zone that has formed based on the 38.2%(1.35195) – 50%(1.34638) Fibonacci retracement levels of the bullish trend pattern. In addition to this, we have the most recent uptrend line coinciding in the same zone. So everything looks good here for the bulls and we may now move down to lower timeframe and look for evidence supporting this bullish view.
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 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 buy setup then you can use any setup and strategy that you have in your arsenal to look for bullish moves and join this buy trade.
Also, don’t forget to protect your buy 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
Traders Academy Club Team.
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