Market NewsTechnical Analysis

USD/CAD: Is It Going to Produce an Evening Star?

USDCAD BoC Economic Indicators
  • USD/CAD seems to have found its resistance at the SMA 30.
  • The pair may end up producing an Evening Star.
  • The H1 chart has been on a bearish correction.
  • Intraday price action has been bearish.
USD/CAD H4 Chart
USD/CAD H4 Chart

USD/CAD -Technical Analysis- H4 Chart

The chart shows that after being bearish and breaching the simple moving average 30, the price has found its support. It consolidated for a while and moved towards the North. The chart produced a doji candle right at the resistance of the SMA 30. As of writing, the current candle has been bearish. If the candle closes as a bearish candle, the sellers may go short in the pair and drive the price towards the level of 1,33500.

On the contrary, if the chart does not end up producing a bearish engulfing candle, but ends up breaching the SMA 30’s resistance, the sellers may wait for the chart to produce a bullish reversal pattern to go long in the pair. The price may find its resistance around 1.35400.

USD/CAD H1 Chart
USD/CAD H1 Chart

Price Action Analysis- H1 Chart

The chart shows that upon producing a double bottom, it made a strong bullish move. As expected, it has found its resistance around 1.34800. It consolidated there for a while and produced a spinning top followed by another bearish candle. The sellers look very active to drive the price towards the South. However, considering the last move, the chart still favors the buyers. The buyers may keep their eyes on the price action around 1.34450 to go long in the pair.

The H4 chart looks good for the sellers. However, the H1 chart suggests that the bullish trend is still active. Thus, it is going to be an interesting battle. A lot depends on the liquidity of the current H4 candle. If it shows its bearish strength, then the pair may continue its move towards the downside.

Written by: Md Tareq Sikder, Senior Analyst Forex Prop News

Contact and follow Tareq on Twitter: @tareqfpn

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