USDCAD Market Shows Signs of the Trend Change

USDCAD Analysis – August 10

USDCAD market shows signs of the trend change after hitting the supply zone at 1.3230 on the 14th of July, 2022. The overall market order flow has been bullish since June 1, 2021. The bullish market trend was a result of the market rejection at the demand zone of 1.2000. The market has been subsequently trending upward with higher highs and higher lows ever since.

Market Major Zones:

Demand Zones: 1.2520, 1.2000
Supply Zones: 1.3010, 1.3230

Market Long-Term Trend: Bearish

The rejection at the demand zone of 1.2000 on June 1, 2021, signalled the beginning of an upward trend. Since then, the market has been rallying upward until it broke and retested the previous resistance level at 1.2520. Since then, the market has been bouncing off the Bollinger Bands (BB) and fluctuating erratically between two major levels: 1.2520 and 1.3010. As the market continues to bounce off the Bollinger Bands, it also continues to trend upward, albeit with very little momentum.

The last two highs of the Stochastic RSI indicator on the daily timeframe show lower highs, whereas the candlestick chart shows higher highs with the second high formed on the 14th of July, 2022. This indicates a bearish divergence. Together with the Moving Averages (MA) Cross, the possibility of a change in the market trend to a downtrend is high.

Market Short-Term Trend: Bullish

The market order flow in the four-hour timeframe appears bullish after the shift in market structure from the downward trend that began on the 14th of July, 2022. The reaction of the market at the 0.618 Fibonacci retracement level indicates a great chance of the market remaining bullish for a long time. The market is expected to remain bullish until there is a change in character and until the four-hour timeframe’s trend-line gets broken.

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