Over the last few days, I hear a lot of people talking about how USDCAD is gaining strength and how it has started to bottom up.
I’m not trying to predict the market here. What I’m trying to do is to take an in-depth look at the technical chart of this currency pair and looking to see where it can go, what barriers (support and resistance) it has to break in order to get there.
Also another key factor is has the price being printing Higher Highs and Higher Lows or is it printing Low Highs and Lower Lows.
Looking at the weekly chart of USDCAD you can clearly is that price is in an uptrend. The most recent weekly price action shows that price has made a double top and currently retracing . To get a better view let’s take look at the daily price action now .
Looking at the daily time frame above you can clearly see that price is still printing Lower highs and Lower lows. Yes price has bounced back from support level at $1.3350.
But what important point out is that price is still below down trend line, still below the 50 EMA and still below structure lows at $1.38900.
So here is the million dollar questions and ill be the first to say that my asnwer is just a educated guess and I will be reevaliating my bias on this pair daily as more price action become available.
So here it is. Given that price action has been respecting the 50 EMA and the down trend line, Price will most probably keep moving up to the 50 EMA and the trend line. When price comes up to this level I will keep a close eye to see how price reacts to these resistance level. If price is able to break above, I will be looking for a retracement to enter. If price is unable to break above this resistance zone, i will be looking for Bearish signal to SHORT.