USDCAD Sellers Aim Lower Following a Bearish Divergence Indication

 

USDCAD Analysis – October 19 

USDCAD sellers aim lower following a bearish divergence’s indication at the 1.3910 supply zone. At the first bounce off the demand zone at 1.2960, prices began to expand upward. Towards the end of last year, USDCAD bounced off this level as it got crashed to the downside by the USDCAD sellers.

USDCAD Significant Zones

Demand Zones: 1.3500, 1.2960
Supply Zones: 1.3910, 1.4130
Consequently, while the market was bearish, USDCAD reached its minimum value on the 5th of April, 2022. Until recently, the market had been gyrating within the 30 to 70 range of the RSI indicator due to the tug-of-war between the bears and bulls in the market. The price buffed upward with increased momentum as it rallied away from the low, only to return to its trading range. This bluff or fake-out occurred on the 9th of May, 2022. Following the fake-out, USDCAD sellers pushed prices into a bullish order block that caused a significant attack on the resistance of the trading range.
 
On August 11, 2022, after a relatively long period of gyration around the range’s resistance, the price surged inward to capture sell-side liquidity. As the price broke out of the trading range to the upside, this liquidity grab rendered the resistance completely invalid. A quick bounce off the invalidated resistance brought about the current market environment on the daily chart. Until the emergence of the bearish divergence, the USDCAD sellers were completely squeezed out of the market in the course of the expansion to the upside.

Market Expectation 

Following the failure swing and the market structure shift on the four-hour chart, the market’s current direction is bearish. The USDCAD sellers are expected to further crash the market down until either of the daily order blocks is reached.

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