Market NewsTechnical Analysis

USD/CAD: The Bull Makes a Breakout and Runs

  • USD/CAD made a breakout at an equidistant channel last week
  • The pair made a strong bullish move in the H4 chart
  • The price has been having a bearish correction in the H1 chart
  • Flipped level of support and bullish trend line may push the price towards the North

USD/CAD-H4 Chart

USD/CAD-H4 Chart

USD/CAD H4 Price Action Justifies the Channel Breakout

The pair traded within an equidistant channel in the H4 chart for quite a while. Last week, it made a bullish breakout at the channel’s resistance and continued its journey towards the upside. The pair had a mixed day on Monday. However, today it made a strong bullish move in the H4 chart. The price stays above Simple Moving Average 30 in the H4 chart. Thus, the buyers may look to go long from the value areas. If the H4 chart produces a strong bullish reversal pattern, the buyers may push the price towards the level of 1.35500. On the other hand, the sellers must wait for the price to have another rejection around 1.35000 to go short in the pair.

USD/CAD H1 Chart

USD/CAD H1 Chart

The H1 Chart Having a Bearish Correction

The H1 chart shows that the price has been obeying a bullish trend line. It made a significant bullish breakout at 1.33980. Thus, the buyers may wait for the price to produce a bullish reversal pattern at the confluence level to go long in the pair. The price may find its next resistance around 1.35000.

However, the way the price has been having the correction; it may end up making a bearish breakout at the confluence level. If that happens, the pair may get choppy for a while in the H1 chart to find its next direction.

Considering these two charts, the Bull seems to have held the key. Now, the buyers are to be patient to see what the price does around that confluence level. A bullish reversal pattern at that area may add extra buying pressure and keep the pair bullish for some days.

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

Contact and follow Tareq on Twitter: @tareqfpn

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