USD/CAD 4H Time Frame AnalysisUSD/CAD 4H Time Frame Analysis
On the 4-hour time frame, USD/CAD has been in a prolonged consolidation phase following an uptrend. However, during this consolidation, we observed a subtle shift in market momentum toward the downside.
Two key support levels have been identified:
1.41800 – First major key level
1.39000 – Next significant support level
These levels will serve as crucial zones for observing future price action.
Recently, a breakout occurred below the first major key level (1.41800), triggering pending sell orders from retail traders anticipating further downside. This move also signaled a Change of Character (CHOCH) in the market structure. However, before a full bearish move unfolded, market makers stepped in to absorb liquidity, hunting stop-losses to create more efficient trade flow within the liquidity zone.
Now that liquidity has been collected, institutional traders are beginning to position themselves for a continuation to the downside. This is often when smart money—large, informed investors—start executing their strategies after a prolonged price build-up.
Trading Strategy:
Sell Limit: 1.41660 (upon pullback or retest of broken support)
Stop Loss: 1.43000 (above the liquidity zone)
Take Profit: 1.38920 (next major key support level)
We'll wait for a retest of the 1.41660 zone to confirm entry, following smart money concepts and liquidity dynamics.
Fundamental Outlook:
Recent Positive Developments Supporting CAD:
April 8, 2025: Canada has been largely exempted from the U.S.'s newly imposed 10% import tariffs. While Canadian exports in steel, aluminum, and autos remain under existing tariffs, the broader exemption has helped support CAD strength, reflecting confidence in Canada's trading stability.
April 7, 2025: The Canadian dollar gained 0.1%, trading around 1.42 per USD (70.42 U.S. cents). This appreciation stems from investor optimism regarding Canada's insulation from global tariff pressures, positioning the CAD more favorably compared to its peers.
Recent Negative Developments Impacting USD:
U.S. CPI (m/m): Forecast shows a decline to -0.1% from the previous 0.2%, suggesting weakening inflation momentum, which could influence the Federal Reserve’s monetary policy stance.
Unemployment Claims: Expected to rise from 219K to 223K, signaling potential softening in the labor market, which may add downside pressure to the USD.
📌 Disclaimer:
This analysis is for informational and educational purposes only and should not be considered financial advice. Trading involves substantial risk, and past performance is not indicative of future results. Always conduct your own research and consult with a financial professional before making any investment decisions.
