USD/CAD – Bearish Reversal Ahead?
In this investment analysis, we are looking at USD/CAD, which is approaching the completion of a Harmonic Bat pattern, with the potential reversal zone (PRZ) around 1.3785 acting as a significant resistance level. After a strong rally from point C, price is now testing this critical area, suggesting a possible short-term correction or bearish reversal.
The TDGMA indicates that the market is nearing overbought conditions. This adds further weight to the bearish reversal thesis, as historically, price has corrected after reaching such levels of overextension.
1. Sell from Point D (Bearish Reversal)
Rationale: The Bat pattern is known for its reliability in forecasting reversals after reaching point D. With price now facing resistance at 1.38 zone and a nearby downtrend line, the odds favor a bearish reversal. The confluence of resistance and the completion of the pattern strengthen the case for a downside move.
Entry: Sell after pattern confirmation and the appearance of a reversal candlestick near the 1.3785 resistance.
Take Profit (TP): 1.36450 (above key support zone)
Stop Loss (SL): 1.38 (above immediate resistance)
The Bat pattern's completion, coupled with the strong resistance at 1.3785 and the overbought signal from the TDGMA, points to a high probability of a bearish reversal. This makes the short setup from point D a highly reliable and profitable strategy. Watch closely for confirmation before entering!
The TDGMA indicates that the market is nearing overbought conditions. This adds further weight to the bearish reversal thesis, as historically, price has corrected after reaching such levels of overextension.
1. Sell from Point D (Bearish Reversal)
Rationale: The Bat pattern is known for its reliability in forecasting reversals after reaching point D. With price now facing resistance at 1.38 zone and a nearby downtrend line, the odds favor a bearish reversal. The confluence of resistance and the completion of the pattern strengthen the case for a downside move.
Entry: Sell after pattern confirmation and the appearance of a reversal candlestick near the 1.3785 resistance.
Take Profit (TP): 1.36450 (above key support zone)
Stop Loss (SL): 1.38 (above immediate resistance)
The Bat pattern's completion, coupled with the strong resistance at 1.3785 and the overbought signal from the TDGMA, points to a high probability of a bearish reversal. This makes the short setup from point D a highly reliable and profitable strategy. Watch closely for confirmation before entering!
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