Market Analysis – January 18
USDCAD bullish trend line has broken. The market has turned bearish, hence, the ascending trendline has failed to function as a support.
USDCAD Long-term Trend: Bearish
Resistance Levels: 1.3700, 1.3900, 1.4000
Support Levels: 1.3300, 1.2900, 1.2500
USDCAD was very bullish last year due to the strengthening of the dollar. Bullish, impulsive moves played out in the price action multiple times on the daily chart. The Moving Averages (Periods 50 and 30) appeared to support the bulls. In August, the test of the Moving Averages fostered a massive displacement. The Stochastic moved from the oversold region.
The buyers got exhausted at 1.3900. Multiple reversal signs were evident at the level—a head and shoulders pattern formed on the daily chart. Shortly after, the daily candles fell below the Moving Averages. Finally, the bullish trend line has failed to support the candles on the daily chart.
USDCAD Short-term Trend: Bearish
The market was consolidating on the 4-hour chart in December. A breakout from the range was observed in January. The market appears to retrace back to test the bullish trendline. The bearish order block is expected to crash the market towards 1.3300 the supporting trendline.
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