USDCAD 1 day time frame 📉 Overall Structure: Descending Channel
The price is moving within a clearly defined descending channel, indicating a downtrend.
Price is respecting both upper and lower boundaries of the channel, confirming strong bearish momentum.
📍 Key Levels:
🔻 Support Area (~1.3740–1.3800)
Price is currently hovering near the bottom boundary of the channel and just above a marked support zone.
Historically, this zone has triggered bullish reactions, making it a key level to watch for a potential bounce or reversal.
🔺 Resistance Area (~1.4150–1.4200)
Marked in purple, this zone aligns with previous swing highs and structure, making it a significant resistance level.
If price bounces from the current support, this is the first target area to watch.
📊 Volume
Notice the increased red volume bars as the price moved lower – this confirms strong selling pressure.
However, the recent candle shows a smaller body with lower volume, hinting at a potential exhaustion of sellers.
📉 RSI (Relative Strength Index) – Oversold
RSI is at 29.47, which is below the 30 level – indicating the pair is oversold.
When RSI dips this low, it often precedes a bounce or temporary bullish correction, especially if price is at a key support (which it is).
✅ Trade Idea / Potential Setup
Bullish Reversal Setup Possible:
The confluence of:
Oversold RSI,
Major support,
Bottom of the descending channel,
makes this a potential area for a long (buy) position.
Target: Resistance area around 1.4150–1.4200 (2.5% gain).
Stop-loss: Below the channel/support zone to limit risk.
🧠 Summary:
USDCAD is in a downtrend but currently testing a major support area at the channel bottom.
RSI is oversold, suggesting limited downside.
Look for bullish confirmation (e.g., bullish engulfing candle or a break of short-term structure) before entering long.
