USDCAD Technical Expert Review - 3 May 2025

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✅ Market Structure Summary:

The market entered a distribution phase, clearly forming equal highs and a head & shoulders–like pattern.

After breaking out of the descending wedge, price surged upward to tap the upper supply zone (gray), sweeping liquidity before dropping sharply.

We now see price reacting to a mid-demand zone, with another deeper demand zone resting below.

📍 Key Technical Zones:
🔹 Upper Gray Supply Zone:

This zone was tapped after liquidity was grabbed from the equal highs.

Strong bearish rejection with impulse candles confirms it as a valid shorting zone.

It remains active and could act as a trap if retested without proper bullish structure.

🔹 Mid-Demand Zone (current reaction point):

Price is currently reacting from this area.

Initial bullish reaction is visible, but the reaction isn't strong enough yet to confirm reversal.

Weak buyer pressure (wicky candles) suggests vulnerability.

🔹 Lower Demand Zone (main target if breakdown occurs):

If the current zone fails, price will likely drop toward this deeper demand block, which hasn't been mitigated yet.

This area could offer a more solid foundation for a bullish reversal.

🔮 Forecast Scenarios:
📉 Primary Bearish Scenario:

If price fails to create higher highs from the current mid-demand zone:

Expect a continuation down toward the lower gray demand zone.

If that breaks, price could target the green higher-timeframe demand around 1.37200.

📈 Alternative Bullish Scenario:

If price builds structure and forms a higher high from this zone:

A short-term rally back toward the upper supply zone is possible.

However, without a strong breakout, that area still holds risk for another sell-off.

Penafian

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