Falling Wedge Pattern on USDCAD, 4H | Important Levels to Watch
Bullish Scenario
On the technical aspect, the loonie seems to have bottomed around 1.27800 by forming a double bottom. From there, a new bullish deck of cards starts to show up, with bulls preparing to prevail.
Bearish Scenario
However, there's a fundamental factor that may have the power to revert the effect and push dollar in deeper, oversold, levels. And that factor is the Stimulus is being on the table by the US. If something like this happens then there's no reason to seek for bullish setups as all the ways will lead to further bearishness.
Why is stimulus making the currency weaker?
By stimulus we mean that the central bank of the country prints new money and injects it in the economy with various ways. In that way, the demand for this country's currency is being lower, for obvious reasons. When supply is increasing more than demand, prices tend to fall.
With these being said, we now know what the possible scenarios are, so we know what to expect on both sides
Tl;dr
Bearish IF: US Government decides to provide a stimulus plan
Bullish IF: Triangle is broken and price starts forming higher highs.
Hope you like this idea and hopefully learnt something you didn't know!
On the technical aspect, the loonie seems to have bottomed around 1.27800 by forming a double bottom. From there, a new bullish deck of cards starts to show up, with bulls preparing to prevail.
Bearish Scenario
However, there's a fundamental factor that may have the power to revert the effect and push dollar in deeper, oversold, levels. And that factor is the Stimulus is being on the table by the US. If something like this happens then there's no reason to seek for bullish setups as all the ways will lead to further bearishness.
Why is stimulus making the currency weaker?
By stimulus we mean that the central bank of the country prints new money and injects it in the economy with various ways. In that way, the demand for this country's currency is being lower, for obvious reasons. When supply is increasing more than demand, prices tend to fall.
With these being said, we now know what the possible scenarios are, so we know what to expect on both sides
Tl;dr
Bearish IF: US Government decides to provide a stimulus plan
Bullish IF: Triangle is broken and price starts forming higher highs.
Hope you like this idea and hopefully learnt something you didn't know!
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