USDCADMarket Outlook: First Principles Applied
When applying first principles to trading, we return to the core structure of price movement: support and resistance. These levels form the foundation for all trading decisions.
Looking at the most recent chart, the latest consolidation zone serves as the primary reference point. The upper and lower boundaries of this range define where trades can be positioned with the least uncertainty.
At present, price action in the middle of this zone has developed an M-shaped formation. This pattern signals both a difficult trading area and an early sign of potential reversal. The challenge for traders here is that momentum becomes less clear, requiring sharper judgment.
Adding to this, the previous top was rejected with a large bearish candle, which strongly suggests selling pressure dominating at higher levels. Taken together, these factors point to an initial directional bias toward the downside.
Conclusion:
By grounding our analysis in first principles—support and resistance—we identify the market’s pressure points. With the current M-pattern and bearish rejection at the top, caution favors a downside bias, awaiting confirmation before entry.
