Will USD/CAD Finally Respect the PRZ?Price is pressing right into a Potential Reversal Zone (PRZ) that lines up perfectly with an AB=CD completion and a long-standing resistance shelf on the 1-hour chart.
The market has been grinding higher for days, but the structure is hinting that the next decisive move may be down—not up.
Here’s why I’m interested, but still waiting for confirmation before pulling the trigger.
🔍 Technical Setup
Pair / TF: USD/CAD – 1 Hour
Trend: Short-term bullish, but extended and showing fatigue
Pattern: AB=CD harmonic completion (no other harmonic pattern)
Key Zones:
PRZ / Resistance: 1.3865 – 1.3875
Support / Trigger area: 1.3830
Structure Clue: If price breaks the latest Higher Low (HL) and prints a fresh Lower Low (LL), it signals that buyers are losing grip and sellers may step in with force.
Divergence: RSI(14) shows bearish divergence (price making higher highs while RSI makes lower highs) — a classic early-warning sign that upside momentum is fading.
🌐 Sentiment & Fundamentals
Retail Sentiment (myfxbook): 32 % short / 68 % long → majority long means there’s fuel for a quick stop-driven drop if price reverses.
USD Index (DXY): bearish bias after recent Fed remarks about a slower pace of hikes and cooling inflation signals.
CAD Index: bullish tone, supported by firm crude oil demand and a Bank of Canada still talking hawkish.
Macro Backdrop:
US–Canada 2-year yield spread has narrowed slightly, favoring CAD strength.
Crude oil holding above key supports strengthens the Canadian dollar further.
These fundamental drivers add conviction to a bearish bias if technical confirmation appears.
🛠️ Trade Plan (only if conditions trigger)
Entry (Sell Stop): 1.38308 — waiting for HL break and a clean LL close to confirm sellers in control.
Stop Loss: 1.38584 (just above PRZ and recent highs).
Target (TP1): 1.38032
Position Size: 0.5 lot (on ~USD 10 K account).
Risk/Reward: 1 : 1 (~$100 risk for ~$100 reward).
Risk Management: If price never breaks HL and instead keeps climbing, no trade is taken — capital stays safe.
🎯 Bias
Although the short-term trend is still technically up, the confluence of PRZ resistance, AB=CD completion, bearish RSI divergence, bearish USD index, and bullish CAD index keeps my bias cautiously bearish — but only with breakdown confirmation.
💡 Takeaway
This is a wait-for-breakdown idea, not a blind short.
If price slices through 1.3830, the door opens for a quick momentum drop toward 1.3810 (and possibly 1.3785 if oil strength continues).
If it doesn’t, I stay flat and safe.
💬 Share Your View
What’s your take on USD/CAD here? Drop your thoughts in the comments and let’s discuss the levels.
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⚠️ Disclaimer
This analysis is for educational purposes only and does not constitute financial advice.
Trading involves risk — always do your own research and manage risk carefully. Past performance ≠ future results.
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