USDCAD reached our targeted destination at EMA200 i.e 1.25622 - according to our analysis published on 20th July and then we published some neutral sentiments regarding the loonie on 25th July to see if the pair has the bearish momentum enough to step out of our bullish channel - which it did. USDCAD smoothly retraced from our 61.8% fibb level in daily and is now underlying 38.2% fibb level. There was a double top created in relative strength index as well with overbought conditions which became another excuse for the pair to provide us with a correction of higher degree. Now that the market is standing below our intraday exponential moving averages 8, 13 and 21 along with daily exponential moving average 200 - indicates that we are going to be facing a short term reversal due to the exponential moving average 50 below in daily. The supply and demand in the current zone seems to be a bit moderate in terms of bullish sentiments but also has provided bears with taking over the loonie by creating new higher lows. 

BULLISH AND BEARISH CONDITIONS/ POSSIBILITIES :

USDCAD in terms of favoring the bulls are more visible due to the exponential moving average 50 in daily below and breaking some major price actions at 1.23000 and still standing above 1.24000. To have a confirmation of the long term rally, we can adjust our buying positions at the current market price with Stop loss at 1.23900 and let it run. If our stop loss gets hit, we will be waiting for more price action below or above the intraday moving averages until a clear bullish fractal is obtained. Also be careful from the market reversal at our 50% fibb retracement level which might provide some dovish sentiments to USDCAD for this area i.e 1.26000 has the potential to favor bears and a continuation to dovish rally. 

USDCAD D1

Aug 01 2021