The USDCAD has fired off a Bullish Engulfing Bar x Inside Bar Combo setup on the daily price action chart. This setup is formed at and rejecting a major daily support level with the first chart below showing how the low of the bullish engulfing bar has moved lower and rejected both lower prices and the key daily support.
The daily bullish engulfing bar is a large engulfing bar with a lower wick and with price closing much higher up towards the days highs. The inside bar that comes after the engulfing bar and completes the combo setup is a small inside bar and when it comes to inside bars, the smaller the better. Often when inside bars form after reversal trigger signals such as here, it can hint at price stalling and trying to gain the required price action order flow it needs to make it’s next big move.
If that next move can be higher and above the bullish engulfing bar, then the next resistance of interest comes in around the 1.0925 area. If price takes a dive lower, then obviously the major daily support is the key level that combo setup is rejecting and if price is to try and push lower, then it would have to break this level.
USDCAD Daily Chart – Key Level
USDCAD Daily Chart – Combo Setup