We take a look at USDCAD pair that has been dropping now for a long number of months.
A closer look at the pair seems to show that we are in a long-term flat correction, therefore trading within a range.
It is not yet clear in which direction this pair will breakout, but for now it seems we remain in the range.
Our bias is that we will now test the upper level of the range to either break above or form the D-Leg of this correction, meaning the bulls might just take over for the next forseeable future.
We will continue to monitor the pair to establish continued bearish movement or a bullish reversal.
Hi there. Thank you for the analysis. Any ideas as to what could cause a bullish reversal? Trying to become educated on both sides of the coin here. Thanks a lot.
TumeloDon
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@timeforclass1999, Hello. Well, I would like to think Global Macro Fundamentals drive the markets, as well as forces such as supply and demand. So basically, things such as inflation, GDP, CPI etc. With those in mind, there is a desire or lack thereof from investors which then drives the prices of the market.
In this case, also, in terms of technical analysis, the support level below the current price will determine how things go. Should price fail to break below, we can expect a bullish impuse maybe follwed by a retest of support. Ultimately, should price fail to break below and our bullish impulse is good enough, we will then have a strong case for a bullish reversal.
timeforclass1999
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@TumeloDon, Thank you so much for your detailed explanation. I appreciate it. Cheers!