The #CanadianDollar weakness is something we can take advantage of this week and could highlight the end of the trend for #USDCAD.
What technical analysis do we need to see to confirm this bias?
Today, we’re going to take a look at USD/CAD as we’re expecting a rally from the current price.
We’re expecting a rally because in the Forex Market Outlook, the candles were becoming very low ranging on the weekly timeframe. Typically, when we see that type of pattern forming, we end up getting a reversal.
The price is in an overall downtrend now; the market is making clear lower lows and lower highs, and the previous resistance is now back to 1.2450 or 1.2460. If the price pulls back, it should find resistance there.
The USD/CAD weekly chart is currently highlighting a potential reversal setup due to the range of the price movement in the last two weeks. They were smaller in range compared to those before, which shows that sellers are losing momentum. Despite the market being in a strong downtrend, we could expect to see a pullback to the previous weekly resistance.
So, we’re looking for the price to come back to that level of resistance and a change in trends.
In the daily timeframe, we’re getting numerous low ranging candles at the previous support point.
We know that was previously a support level because the price tried to find buyers when it went to that area in the past. At the moment, the price is showing us a bit of bullishness.
If the price breaks above this high and closes above, we’ll get a bullish engulfing candle, and we could then look for an opportunity to trade to the upside.
The daily timeframe shows us that the price has been finding support recently. If the daily candle forms a bullish engulfing candle, we could expect to see a bullish move from the pair.
Alternatively, you could look for a potential break in the trendline resistance as we’ve got a bit of a squeeze pattern forming.
If you want to look for a potential trading opportunity, you could either wait for some bullish reaction or bullish engulfing here, or wait for the break in the trendline resistance because the price found resistance there before. If the price breaks out, we could see the change in trend and the market move to the upside.
Alternatively, we can look for the price to break through the trendline resistance. If the price closes above this level, we can look for a breakout opportunity.
Keep an eye on USD/CAD, it’s one to watch because it is in line with the CA Dollar weakness. We could be seeing the trigger for a rally today.
You can try trading with the USD/CAD pair for as low as $100 when you open a live account with us. Fast execution, zero commission foreign exchange, and prompt support–that’s the Blueberry Markets experience.