USDCAD Heads Toward the Diagonal Support

USDCAD Analysis – November 23

USDCAD heads toward the diagonal support. The US dollar has been losing value against the Canadian dollar since the rejection at the resistance level of 1.3980. Following each break of structure in the downtrend, more bears storm the market with their sell orders.

USDCAD Significant Zones

Demand Zones: 1.3220, 1.2400
Supply Zones: 1.3980, 1.4640

USDCAD Long-term Trend: Bullish

The market recently purged itself from a bearish order block. As a new lower low is sought, the price gets closer to the diagonal support. Importantly, the market’s overall trend is still bullish on the higher time frames. Until the diagonal support gets broken successfully, the market will always remain bullish regardless of the bears’ gimmicks and stunts in the market. Some months ago, the market began to ascend alongside an ascending channel. The high of the daily candlestick on February 24, 2022, marked the emergence of the ascending channel. USDCAD continued algorithmically inside this ascending channel until a breakout in September 2022.

The breakout from the ascending channel was solely due to the massive rally in price after the previous resistance of 1.3220 was successfully broken. On April 5, 2022, the selling pressure of the USDCAD sellers diminished drastically, and the price headed upward. Ever since then, the low of that day has never been reached. On June 8, 2022, the bulls began to show more interest in buying the US dollar at the expense of the Canadian dollar. However, when the 1.3980 supply zone was reached, the bulls took a break from the market. The price delivery to the downside on November 10, 2022, is currently the reason for the new bearish wave in the market.

USDCAD Short-term Trend: Bearish

The direction bias on the four-hour chart is downward. This is due to the recent reaction of price in the daily bearish order block. However, once the diagonal support is hit, USDCAD is expected to resume its trend to the upside.

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