Market Analysis – February 1st
USDCAD market structure remains bearish since the trend reversal at 1.390. The market is descending in a parallel channel on the daily chart.
USDCAD Key Levels
Resistance Level: 1.3200, 1.3900, 1.4200
Support Level: 1.2900, 1.2700, 1.2500
USDCAD Long-term Trend: Bearish
The bullish trendline aided the bulls’ engagement to fill buy orders through the second half of the previous year. The test of the ascending trendline occurred multiple times when the market was already oversold. The last bullish impulsive move was initiated in September. The market trend changed with the formation of a head-and-shoulders bearish reversal pattern. The Moving Averages of periods nine and twenty-one also crossed to signify the new trend direction.
The market retraced to 1.3200 after the first bearish impulsive motion. Lower highs and lower lows formed after the retracement to 1.3700 was fulfilled. The break and retest of the bullish trendline encourage more sellers to engage the market. The bearish channel is guiding the price action to the support levels.
USDCAD Short-term Trend: Bearish
Each new lower high has been observed to foster further bearish displacement. The market is currently approaching the support level at 1.2900.
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