USD/CAD has been in a long-term uptrend, recently approaching a critical resistance zone. Price action suggests a potential shift from bullish to bearish due to the formation of a harmonic pattern that implies a possible corrective move. However, given the strength of the current uptrend, any pullback could be temporary, presenting future buying opportunities around key support levels.
Technical Indicators TDI Divergence: Multiple bearish divergences on the TDI indicator highlight potential weakening in upward momentum, reinforcing the possibility of a short-term correction. Moving Averages: The MAs are positively sloped, supporting the medium- to long-term uptrend, but price has moved significantly away from them, suggesting a higher probability of a near-term pullback.
Trade Strategy: Sell at Resistance Entry: 1.391 zone Stop Loss (SL): 1.4000 Take Profit (TP): 1.36970 Risk-Reward Ratio: 1:2.5 Rationale: The proximity to key resistance, combined with bearish divergences, supports a potential corrective move.
USD/CAD displays mixed signals of continuation and correction. Short-term indicators suggest a weakening, but the long-term uptrend remains intact. The most robust strategy here is a sell at resistance, backed by harmonic patterns and divergence signals. After a potential pullback, buying on corrections could be advantageous if the price resumes its uptrend. Monitoring technical developments and price action on lower timeframes is essential for timing entries.
Disclaimer: The information provided does not constitute investment advice.
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