- USD/CAD bears are making a double bottom near the 1.3450 support area.
- In the event of a double bottom (DB) break, it carries the 61.8% Fibonacci retracement near 1.3415.
USD/CAD it is picking up traces of the bullish rally from yesterday’s trade at 1.3450/30 as a potential support structure in what has so far been a choppy descent from above 1.3500. The following illustrates a downside bias ahead of another wave of upside demand should US dollar bulls be motivated by a discount in the coming sessions and days ahead.
USD/CAD previous analysis
It was mentioned earlier in the week in the following analysis, USD/CAD Price Analysis: Bulls eye break of 1.3450 to look at 1.35 areathat price started to correct but had to issue 1.3450 first:
There was a price imbalance left over from the big sell-off earlier in the year. There has been a thesis of easing towards 1.3550.
As shown, a bullish accumulation pattern played out with price respecting the spring and a subsequent break of resistance near 1.3450, leading to an attempt to ease the price imbalance, although not across its breadth.
At this point, it’s a wait-and-see issue, but the bias is bullish while it’s above old resistance:
USD/CAD Chart H4
The price forms an M-formation on the 4-hour chart. The pattern is a reversal setup for the sessions ahead where the price would be expected to retrace back into bearish momentum and target the line near 1.3490. However, the decline may not be closed yet, although there is a current slowdown near 1.3450 and the 38.2% Fibonacci retracement area from the previous bullish band. Lower timeframes can be evaluated to assess whether the bears are throwing in the towel, which could trigger a bullish move on the day ahead:
USD/CAD 15 minute chart
According to 15 min diagramThere are two price imbalances (PI) that could be mitigated on the way to the 61.8% Fibonacci retracement near 1.3415 if the double bottom (DB) is broken.