Usdcad has made its bull run since last one month. Leaving the trails behind, a correction is due at the support levels of 1.2440

- Market structure: Markets structure in USDCAD is bullish. Even on higher time frames, its bullish. But what needs to be focused is, we are tapping a major resistance on the daily/weekly timeframe. This resistance has the strength to push down USDCAD for a correction for around 120 pips. Also, a double top has been formed on the pair. The higher the time frames the higher strength of a level.

- Trendline: USDCAD is in an ascending channel. The upper trendline has been tested at the resistance area. This gives us a confluence of resistance with the trendline. The gap between the channels sustains at a 200 pip margin. Another ascending trendline is in the formation. Usdcad has not yet reached the trendline to either break or retest.

- Retracement: The golden area retracement of 75-78.6% is tapped in the daily/weekly time frame. This level also confluences with the resistance and trendline.

-EMA's: Both EMA’s are below the market prices, representing the bullish bias. The EMA 50 has been tested after the break, but the EMA 200, is due a correction. We will target the test of EMA 200 at this level as the level is strong and has the capacity to push USDCAD down to test the EMA 200.

- RSI/CCI: RSI is at 60 and CCI at 139 respectively. RSI has room to go down below 50, to the over sold region. RSI might test the descending trendline. But even it doesn’t, we do have 3 other confirmations, which make a high probability setup. CCI on the other hand, is testing the ascending trendline and might break it to confirm the sell pressure. We have room till 0 of CCI for sells from the current level of 139.

USDCAD trade plan is one of the high probability setups, which can reap 1:5 risk to reward as we can keep the stop loss tight. Higher time frames are always a strong representation of where the market is off to.

USDCAD due a correction

Jul 16 2021