USDCAD is currently recovering from the July 29 sell-off, but be prepared for another round of selloff.
Beginning with the Commitment of Traders report, non-commercial long positions increased 1,340 contracts covering the short positions two times over.
Nevertheless, my key sell-off sentiment is based on the hourly supply zone with the expectations of holding up.
Currently, I am targeting the 1.318~ zone for another short entry. On the hourly trend, it appears the trend has changed as we have observed multiple instances of lower highs and lower lows. By fractal counting, this is an indication that, at least on the hourly chart, this is currently a downtrend. This makes sense to sell into a downtrend.
Additionally, the current rally is a good indication of very weak buying with short sellers covering their positions and possible traders buying for scalp profits. This is indicated by the amount of candles and the lack of significant movement.