- USD/CAD bears are facing a double bottom near the 1.3450 support zone.
- Bears are targeting a 61.8% Fibonacci retracement near 1.3415 if the double bottom (DB) is broken.
The USD/CAD It is eating into the tracks of yesterday’s bullish rally with 1.3450/30 as a possible support structure in what has been a choppy decline from above 1.3500 so far today. Illustrated below is the bearish bias leading up to the next wave of bullish demand in case US dollar bulls are motivated by a price discount in the coming sessions and days.
There was a price imbalance that had been left behind since the big sell-off at the beginning of the year. There was an easing thesis towards 1.3550.
As illustrated, the bullish accumulation pattern played out, with price respecting the spring and a subsequent resistance break near 1.3450 leading to price imbalance mitigation, though not entirely.
At this juncture, it is a matter of wait and see, but the bias is bullish as long as it is above the old resistance:
USD/CAD H4 Chart
The price is forming an M on the 4-hour chart. The pattern is a reversal setup for the next few sessions, where the price is expected to return to bearish momentum and head for the neckline near 1.3490. However, the downtrend may not be over yet, although we currently see a slowdown near 1.3450 and a 38.2% Fibonacci retracement zone of the range of the previous up leg. On the lower time frames you can gauge if the bears are throwing in the towel, which could trigger a move to the bulls tomorrow:
USD/CAD 15 minute chart
Based on the 15 minute chart, there are two price imbalances (PI) that could be mitigated en route to a 61.8% Fibonacci retracement near 1.3415 if the double bottom (DB) is broken.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.