The USDCAD pair encountered significant resistance at the key level of 1.440, ultimately leading to a bearish price reversal after a period of consolidation lasting several months. This resistance level proved too strong for the bulls to breach, and the subsequent decline was swift and decisive. As a result, the price declined into a zone of lower market participation, allowing it to drain freely with minimal obstacles. The lack of significant support in this zone enabled the price to move rapidly, with little to slow its descent to 1.390.
The USDCAD market previously experienced multiple rejections at the key level of 1.390. This resulted in the formation of a range between 1.390 and 1.350. The Anchored Volume Weighted Average Price (VWAP) indicator highlighted the intense market activity in this region, providing a plausible explanation for the range formation. This level has proven to be a significant battleground between bulls and bears.
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Following a bullish breakout from this zone, the price surged rapidly, encountering another region of high market participation at 1.440. This level proved to be a significant hurdle. The subsequent rejection led to a bearish reversal. The failure to sustain the breakout above 1.440 has reinforced the bearish outlook.
USDCAD Short-Term Trend: Bearish
Currently, the price is aggressively driving back towards 1.390, characterized by high market participation. Given the presence of a major hurdle in its path, it is crucial to manage risk effectively. Traders should be cautious and prepared for potential price movements as the market approaches this critical level, with 1.390 and 1.340 serving as potential support levels to watch.
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USDCAD Short-Term Trend: Bearish
USDCAD Short-Term Trend: Bearish
