USDCAD Daily – Bulls might be gathering strength

Written on 28/06/2021 by Theunis Kruger, FX Trainer at FXTM

The Loonie on the D1 time frame was in a downtrend until 1 June. A lower bottom was formed at 1.20066, and demand started overcoming supply.

After the bottom at 1.20066, the market broke upwards through the 15 and, 34 Simple Moving Averages, and the Momentum Oscillator broke the zero baseline into positive territory. The change to bullish  momentum was confirmed with a Three White Soldiers Candle Pattern occurring during the breakout.

A critical resistance level was formed when a higher top was recorded on 21 June at 1.24867. The bears then tried to regain control but a higher bottom formed on 23 June at 1.22521 at a support level near the 15 Simple Moving Average.

If the Loonie manages to break through the critical resistance level at 1.24867, three possible price targets can be anticipated. Attaching the Fibonacci tool to the higher top at 1.24867 and dragging it to the support level at 1.22521, the following targets can be calculated. The first target can be estimated at 1.26317 (161%), the second price target may be calculated at 1.28663 (261.8%). Finally, the third and final target may be predicted at 1.32459 (423.6%).

If the 1.22521 possible support level is broken, the anticipated price targets must be invalid and re-assessed.

As long as bulls maintain a positive sentiment and demand overcomes supply, the Loonie on the Daily time frame will be indicated as a bullish scenario.

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Forex Fraud Analyst Team

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