The CAD is gaining strength as the USD weakens further. The price reached the yearly high at the 1.2900 resistance level the previous year on December 20th. A reversal at the resistance level caused the CAD to gain strength as the USD weakened. As the bulls purchased the CAD, the market dived into the 1.250 demand zone. Multiple rejections were seen from the 13th of January this year till the 20th of January. Candlestick shadows formed under the daily candles from that 13th.
Significant Zones on USDCAD
Support Zone: 1.2600, 1.2500 Resistance Zone: 1.2900, 1.2800
USDCAD Long Term Trend: Bearish
The support zone allowed more USD to be bought. The Parabolic SAR indicated bullishness in the market. The increased rate of purchasing the USD led to a rise in price. At this point, the USD was gaining strength as the CAD weakened. The bulls experienced resistance at 1.280. The market consolidated throughout February.
The buyers of USD stormed the market once more as the demand zone at 1.260 aided the bulls. The resistance zone at 1.280 could no longer hold. The bulls pushed through the zone and back to 1.290. The buyers of USD got exhausted at 1.290. A crash in the market was the resultant effect.
USDCAD Short Term Trend: Bearish
The downward move from 1.290 was initiated on the 1.290 with three falling soldiers. Eventually, there was a change in the market’s direction. The CAD is currently gaining strength as the USD weakens further. The four-hour chart shows the demand zone at 1.260 has been bridged by the sellers of the USD. The bears are currently aiming for the next demand zone at 1.250. The Stochastic indicator on the daily is presently showing the USD is oversold. A reversal is likely to occur at 1.2500.
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Azeez Mustapha is a trading professional, currency analyst, signals strategist, and funds manager with over ten years of experience within the financial field. As a blogger and finance author, he helps investors understand complex financial concepts, improve their investing skills, and learn how to manage their money.
