top of page

The USDCAD pair finally pulled back to a key swing level. What’s next?

As for the moving averages, they have crossed to the downside, potentially signalling an early indication of a changing trend. However, it's essential to note that the price has not yet established a new lower low. Consequently, the overall market structure still retains a bullish disposition. This nuanced situation calls for careful monitoring as traders navigate this currency pair.

Analysing the 4-hour chart, a significant development emerges. Since the start of August, there has been a noticeable and prolonged divergence with the MACD indicator, which is indicative of diminishing momentum. This divergence has now culminated in a substantial pullback.

The level at 1.3489 holds pivotal importance in this context. A breach beneath this level would signify a shift in the prevailing trend from bullish to bearish, potentially ushering in a descent toward the 1.33 handle.

It's worth noting that buyers are likely to be watchful around this key level, considering a potential entry with well-defined risk management measures just below the swing level. Their objective would be to target a new high.

Conversely, sellers would be inclined to enter the market if the price confirms a break below this level, which could prompt a further decline toward the 1.33 handle. This juncture presents a crucial point for traders to watch closely as they navigate their positions in this currency pair.

Any questions or comments please reply.


Head Trader & Coach

9 views0 comments


bottom of page