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Monday, March 4, 2024

Chart Artwork: Assist Break & Retest on USD/CAD?


The Greenback and Loonie each have a busy schedule forward, making this textbook technical setup on USD/CAD one to observe for each bulls and bears?

Will the draw back break be prolonged or may there be a bounce forward?

USD/CAD: 4-Hour

USD/CAD 4-Hour Forex Chart by TradingView

USD/CAD 4-Hour Foreign exchange Chart by TradingView

Based mostly on our newest Week Forward in FX submit, it’s gonna be a busy one for the foreign exchange markets, particularly for the U.S. greenback and the Canadian greenback.

Apart from central financial institution communicate, Dollar merchants will seemingly see volatility from U.S. GDP and core PCE Value Index updates, whereas Loonie merchants have Canadian GDP and the employment updates to work with.

Keep in mind that directional biases and volatility situations in market value are usually pushed by fundamentals. If you happen to haven’t but completed your fundie homework on USD/CAD, then it’s time to do some work by testing the foreign exchange calendar and keep up to date on day by day elementary information!

When you’ve got completed your fundies homework, then it’s time to maneuver to the charts!

On the 4-hour chart above, we will see USD/CAD has been below promoting stress in November. However there have been consumers holding the road fairly effectively between 1.3650 – 1.3700, earlier than it will definitely broke this previous week.

Given the downtrend in USD/CAD and sure choose up in volatility, this space is one to observe for the bears in case the market bounces increased to raised shorting costs, a possible technical situation on condition that the S1 pivot assist stage and oversold stochastic sign could attract some technical merchants, and even short-term revenue takers.

If we do see a bounce and retest of the damaged assist space, that’s the place bears ought to actually search for quick promoting triggers because it additionally contains different technical arguments which will attract additional promoting orders.

Apart from the damaged assist space / minor psychological stage, we will see that the weekly Pivot Level and falling ‘highs’ trendline additionally traces up in that space.

And on the higher finish of that space, we will additionally see transferring averages, which may attract technical sellers as effectively, particularly with the 100 SMA crossing beneath the 200 SMA.

A retest and growing bearish reversal patterns could attract additional promoting on the at level, however as soon as once more, it’s seemingly as much as the fundies on whether or not that space holds as resistance or not.

And if the fundies sustainably pushes the pair above that technical confluence space roughly between 1.3650 – 1.3250, then we may see recent technical consumers leaping in on USD/CAD, together with potential quick place revenue taking.

In that case and upside momentum picks up, then a transfer to 1.3800 – 1.3850 could also be within the playing cards, primarily based on the day by day common true vary of round 75 pips and if elementary gamers go bullish on the pair.

However what do you suppose? We love to listen to everybody’s concepts so be at liberty to drop a remark beneath and share your ideas!

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