The USDCAD market has exhibited bullish order flow starting from January 30th at a price level of 1.32998, reaching a peak of 1.34709 on January 31st. However, a pullback was observed subsequent to the upward move, as price retraced to the H4 and M15 demand zones. The potential for a rally to the upside exists if these double demand zones hold. It should be noted that as the end of January approaches, there is also a possibility of price moving away from these zones in pursuit of raiding liquidity below in the form of an irregular W pattern.
From a market maker perspective, the 13EMA has demonstrated a clear divergence from both the 50EMA and the 200EMA, suggesting the potential for the recent pullback to reach a point of exhaustion. To mitigate risk and maximize potential returns, it is recommended to carefully observe the market for indications of price rejection of these demand zones, or for market makers to "crab" liquidity below these levels, prior to entering a long position.
Considering the present wide spread during this trading session, it may be prudent to wait for further price consolidation until the London session open before making a decision. In this scenario, a short-term target of 1.3350 (with 200EMA acting as possible resistance), and a medium-term target of 1.34000 have been identified as potential long trade targets.
From a market maker perspective, the 13EMA has demonstrated a clear divergence from both the 50EMA and the 200EMA, suggesting the potential for the recent pullback to reach a point of exhaustion. To mitigate risk and maximize potential returns, it is recommended to carefully observe the market for indications of price rejection of these demand zones, or for market makers to "crab" liquidity below these levels, prior to entering a long position.
Considering the present wide spread during this trading session, it may be prudent to wait for further price consolidation until the London session open before making a decision. In this scenario, a short-term target of 1.3350 (with 200EMA acting as possible resistance), and a medium-term target of 1.34000 have been identified as potential long trade targets.