The USDCAD has been in a corrective phase for several trading sessions as visible in this H4 chart. This currency pair has formed a falling wedge formation and price action has been centered around support levels. The latest candlestick has formed an inverted hammer and we believe this pair will move higher back into its declining resistance level and possibly into its descending 50 DMA.
MACD has bottomed out and confirmed the correction. Selling pressure has dropped below its moving average and we expect levels to adjust higher from here. RSI has reached oversold territory and a breakout from these levels should add to the minor rally.
We recommend a long position at 1.0150. This would be in addition to a long position we took on March 3rd at 1.0322. We also closed our two short positions today at 1.0158 for a profit of 27 pips. We recommend traders to set a stop sell order at 1.0100.
Traders who wish to exit this trade at a loss are advised to place their stop loss level at 1.0100. We do not use stop loss levels and will execute this trade as recommended. Place your take profit level for both long positions at 1.0210.
Here are the reasons why we believe this forex pair will move higher
- USDCAD formed a falling wedge formation
- Price action has been centered around support
- Latest candlestick pattern formed inverted hammer at support
- MACD has bottomed out
- RSI trades in oversold territory
- Short covering rally
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