USDCAD moved massively on the following Monday. The fundamental reason behind the move was the OPEC meeting in which the parties had decided to increase oil supply unanimously. Oil is inversely correlated to USDCAD. Oil dipped, USDCAD surged. Fundamentals need to be corrected sooner or later. On USDCAD, we are planning a setup to take the correction. Earlier the posted USDCAD analysis was stopped out. Now a fresh analysis will be targeted at around 120-300 pips depending on from where the market reverses.

- Market structure: USDCAD is ranging at the levels of 1.2730-1.2780. This range is a strong one. Given the bullish pressure, we anticipate market breaking this resistance to go to the next one at 1.2830 where we have our short trade plan. The structure is bullish. The shorts on the resistance are in anticipation of the bullish correction. The resistance is overlapped with weekly and daily time frames

- Trendline: Earlier, USDCAD had broken the descending trend line, which validated the breakout buys. Right now, it is within an ascending wedge. The support ascending trendline is still far off. We will wait for its break or test once market starts diving down. On the resistance trendline, USDCAD has broken out but no candles have opened or closed above to validate the confirmations of the buy.

- Retracement: The marked resistance level has a daily and weekly 75-78.6% retracement levels, in confluence with the resistance. Giving us two higher time frame confirmations.

- EMA's: Both EMA’S are bullish. Recently, EMA 200 was broken and was unable to test. Our anticipation of the short sell at the resistance is targeted at the retest of the EMA 200.

- RSI/CCI: Both oscillators are in an over-bought region. RSI is at 73 and CCI at 182. A pull down from these oscillator regions is imminent.

We have two high frame confirmations on the USDCAD short sells: resistance and the retracement golden levels. Oscillators will also reflect over bought region once our marked resistance is reached for sells.

USDCAD due bullish correction

Jul 20 2021