Baxia Markets
June 26, 2024

USDCAD Hammer Candlestick Forms Major Support Level

market analysis header image


The USDCAD is showing signs of strength following a significant flash dip that created a long wick at the recent swing low. Yesterday's candlestick formed a hammer, a bullish reversal candlestick pattern, reinforcing the swing low as a major support level. This hammer candlestick, which spanned 60 pips, indicates a potential shift in market sentiment. Today, the market continues its rebound, targeting yesterday's high and aiming for the 200-day EMA.

Despite the overall bearish trend, the market is currently experiencing a pullback. The 50-day EMA is converging towards the 200-day EMA, signaling a reduction in bearish momentum as the gap between the two moving averages narrows. This convergence often suggests that the market may be preparing for a reversal or at least a temporary pause in the prevailing trend.USDCAD Hammer Candlestick Forms Major Support Level

The Ichimoku indicator provides further insights into this potential pullback. The Tenkan-sen line has crossed above the Kijun-sen line, a typical signal of a bearish pullback. This crossover supports the notion that the market is in a corrective phase rather than continuing its downward trajectory. Key resistance levels to watch include the 200-day EMA and the upper boundary of the Ichimoku cloud.

Additionally, oscillator indicators have moved into bullish territory. The MACD signal line has crossed above the zero line, indicating a potential shift in momentum. Furthermore, the RSI has broken above 60%, suggesting increased bullish pressure. These indicators collectively support the view that the USDCAD may continue its upward correction in the near term, despite the overarching bearish trend.

In summary, while the broader market trend for USDCAD remains bearish, several technical indicators suggest a pullback is underway. Key resistance levels, such as the 200-day EMA and the upper Ichimoku cloud, will be critical in determining whether this rebound has the strength to continue or if the bearish trend will resume.

Key Takeaways

  1. USDCAD formed a bullish hammer candlestick, indicating potential reversal.
  2. Market targets EMA 200 after rebounding from recent lows.
  3. Convergence of EMA 50 and EMA 200 suggests slowing bearish momentum.
  4. Ichimoku indicator shows Tenkan-sen crossing above Kijun-sen, indicating a pullback.
  5. Oscillators like MACD and RSI signal increased bullish pressure.

Key Economic Releases to Watch Today

Time Currency Event Impact Actual Forecast Previous
06:35 AUD RBA Kent Speech Medium      
08:30 AUD Monthly CPI Indicator High 4% 3.8% 3.6%
13:00 EUR GfK Consumer Confidence High -21.8 -18.9 -20.9
13:45 EUR Consumer Confidence Medium 89 89 90
17:00 EUR Unemployment Benefit Claims Medium    -17K -36.8K
17:00 GBP CBI Distributive Trades Medium   1 8
19:00 USD Building Permits Final Medium   1.386M 1.44M
19:00 USD Building Permits MoM Final Medium   -3.8% -3%
21:00 USD New Home Sales Medium   0.64M 0.634M
21:00 USD New Home Sales MoM Medium   2.9% -4.7%
21:30 USD EIA Gasoline Stocks Change Medium   -1.1M -2.28M
21:30 USD EIA Crude Oil Stocks Change Medium   -3M -2.547M


News Article CTA - Trading with Baxia Markets 2024

Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. 

Nothing contained in this website should be construed as investment advice. Any reference to an investment's past or potential performance is not, and should not be construed as, a recommendation or as a guarantee of any specific outcome or profit.

Subscribe by Email