Market is travelling finely in accordance to our analysis published on 1st August from market price 1.2430 with targeted destination at 1.2749 and stop loss 1.2391. We anticipated that the double top created in relative strength index with overbought conditions would became another excuse for the pair to provide us with a correction of higher degree. The market was standing below our intraday exponential moving averages 8, 13 and 21 along with daily exponential moving average 200 - by which we indicated that the market might face 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. The pair is still favoring the bulls 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.  Be careful from the market reversal at our 61.8% 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.

BULLISH AND BEARISH CONDITIONS / POSSIBILITIES :

From current market scenario, we need a bullish fractal above 1.25548 price action to take consider the market move as adapting hawkish sentiments and is set to continue for a bullish rally towards 1.2740. However if US dollar versus Canadian dollar took a reversal from our 61.8% fibb level with an impulsive bearish closing, then we will witness the pair going towards retesting our lower trend line at 1.22646. We are still taking the head and shoulder pattern of a smaller degree in daily as valid, breaking above its neckline or reversing from 61.8% fibb level will be the deciding point.  

USDCAD

Aug 07 2021