The USD/CAD currency pair, on the H4 time-frame, was in an upward move until the 20th of August when a higher top was recorded at 1.33459. Selling pressure overwhelmed buying pressure as the bears started to find the price attractive, causing the upward momentum to be reversed.
A closer look revealed that the Momentum Oscillator displayed negative divergence between point a and b compared to the price at 1.33390 and 1.33459. This could have alerted technical traders to a possible reversal in the making.
After the high at 1.33459, the price broke through the 15 and 34 Simple Moving Average and the Momentum Oscillator broke the zero baseline. This further strengthened a possibility technical reversal in progress.
A likely critical support level formed when a bottom was recorded at 1.32545 on the 21st of August. Buyers are currently trying to push the market higher but supply seems to be overcoming demand.
If the USD/CAD breaks through the critical support level at 1.32545, then three possible price targets may be projected from there. Attaching the Fibonacci tool to the bottom at 1.32545 and dragging it to a possible resistance level near the 34 Simple Moving Average at 1.33158, the following targets may be calculated. The first target can be anticipated at 1.32166(161 %). The second price target can be predicted at 1.31554 (261.8%) and the third and final target may be expected at 1.30563 (423.6%).
If the possible resistance level at 1.33158 is broken, the scenario is invalidated and will need to be re-evaluated.
As long as sellers maintain a negative sentiment and supply overcomes demand, the outlook for the USD/CAD currency pair on the H4 time-frame will remain bearish.
A closer look revealed that the Momentum Oscillator displayed negative divergence between point a and b compared to the price at 1.33390 and 1.33459. This could have alerted technical traders to a possible reversal in the making.
After the high at 1.33459, the price broke through the 15 and 34 Simple Moving Average and the Momentum Oscillator broke the zero baseline. This further strengthened a possibility technical reversal in progress.
A likely critical support level formed when a bottom was recorded at 1.32545 on the 21st of August. Buyers are currently trying to push the market higher but supply seems to be overcoming demand.
If the USD/CAD breaks through the critical support level at 1.32545, then three possible price targets may be projected from there. Attaching the Fibonacci tool to the bottom at 1.32545 and dragging it to a possible resistance level near the 34 Simple Moving Average at 1.33158, the following targets may be calculated. The first target can be anticipated at 1.32166(161 %). The second price target can be predicted at 1.31554 (261.8%) and the third and final target may be expected at 1.30563 (423.6%).
If the possible resistance level at 1.33158 is broken, the scenario is invalidated and will need to be re-evaluated.
As long as sellers maintain a negative sentiment and supply overcomes demand, the outlook for the USD/CAD currency pair on the H4 time-frame will remain bearish.