USDCAD Retraces into Daily Bullish Order Block

Market Analysis – May 23

The USDCAD pair has declined after testing the resistance trendline on the daily chart, sinking into a bullish order block at 1.3600. Despite this pullback, the market structure remains bullish, suggesting an anticipation of a potential bullish breakout.

• Demand Levels: 1.3600, 1.3500, 1.3400
• Supply Levels: 1.3800, 1.3900, 1.4000
  

  

USDCAD Long-Term Trend: Bullish

Since November 2022, USDCAD has been trading within a range of 1.4000 to 1.3000, a span of nearly 1000 pips achieved in less than two months (October and November 2022). For almost two years, the market has continued to trade within this range, consistently forming lower highs and higher lows.

The resistance trendline anchoring the lower highs on the daily chart has curtailed the price ascent within the bullish trend, resulting in a pullback to the bullish order block at 1.3600. The Stochastic indicator is in the oversold region, signaling a potential resumption of the price ascent. Additionally, the price has tested the lower band of the Bollinger. The retest of the band is expected to provide support for this upward movement.

USDCAD Short-Term Trend: Bullish

Forex signal analysts have observed a bullish shift in market structure on the daily chart, with higher highs and higher lows forming upon testing a bullish trendline. Currently, traders expect the price to rally back to 1.3890, potentially enforcing a breakout.

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