In this technical analysis of USD/CAD, we examine the ongoing bearish trend and the key levels traders should monitor. The pair is currently trading around 1.3586, facing downward pressure from multiple bearish order blocks (OB). As the price action unfolds, we highlight areas of interest, including order blocks, break of structure (BOS), and fair value gaps (FVG).
Bearish Order Block (OB) at 1.3946: Major Resistance
USD/CAD has been in a downward trend since reaching the bearish OB around 1.3946 in early August. This zone, acting as a strong resistance, has led to multiple rejections and has set the tone for the overall bearish sentiment. Any attempt to retest this level is likely to face heavy selling pressure unless there’s a significant catalyst that can push the price higher.
Fair Value Gaps (FVG) and Break of Structure (BOS)
Throughout the chart, we observe several Break of Structures (BOS), each reinforcing the bearish momentum. Following these BOS levels, the market has left behind multiple Fair Value Gaps (FVG), particularly around 1.3650 and 1.3800, which could serve as potential areas for price retracements before the bearish trend resumes. These FVGs present short-term opportunities for traders to look for price corrections before further downward moves.
Recent Bullish Momentum and Short-Term Reversal
In recent sessions, USD/CAD has shown signs of bullish momentum with a small trend reversal observed near the 1.3480 level, where a bullish OB has provided support. This led to a price bounce, and the pair is now approaching a Bearish OB near 1.3620. This zone will be critical to watch, as rejection here could signal the continuation of the downtrend.
Balance Price Range (BPR) at 1.3550
One notable area is the Balance Price Range (BPR) near 1.3550. If USD/CAD holds above this level, we could see another leg higher to test the Bearish OB at 1.3620. However, if the price fails to hold this level, it could indicate that the bears are regaining control, potentially pushing the pair back to support levels around 1.3480.
Conclusion: Bearish Bias Remains in Control
The broader outlook for USD/CAD remains bearish, with several resistance levels capping price advances. The key to any short-term bullish reversal lies in the price’s ability to break through the Bearish OB at 1.3620 and move higher toward 1.3650. However, if the market rejects these levels, traders should expect a retest of the lower support zones, continuing the bearish dominance.
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