USD/CAD VWAP Market Analysis

As a follow-up from the quick VWAP presentation I thought to provide you with a VWAP analysis post to understand in some degree the current structure of a market with this tool. In this particular post I will share my observations on USD/CAD. First and foremost it is a good idea to take a good look at the current plain macro structure of a market. That said, here is the yearly perspective:

At the first glance, we can observe an one-time framing higher behavior which occurred 3-4 years ago. The market broke the high from 2009 and seemed to be heading to the highs from 2000, in my opinion. However, the market is trading below this year’s open.

With that in mind, we can now move forward to the VWAP analysis. Firstly, I like to take a look at the yearly VWAP structure on a weekly bar chart. Looking at this chart, we can see various things. The yearly developing slope is clearly to the downside. The market is trading in the previous year’s value close area in quite balanced behavior and currently we are testing the balance area high. In my opinion, the next possible destination is the developing yearly VWAP which is somewhat confluent with the previous year’s value area high close level. First we have to break above this current balanced structure.

Looking at the daily chart, we can identify a one-time framing higher behavior 5 days ago. The last candle’s reaction should be seen as an attempt to “trap” sellers with stops above Friday’s high in which the market can blow through next week.

Currently the market trading above the quarter’s developing value high. Additionally we broke above the previous quarter’s value area high close level. The value area low close level from a previous quarter is confluent with the mentioned yearly developing VWAP area.

The monthly VWAP perspective is quite the same, so we are directly moving forward to the weekly perspective. I’m quite interested at the area around the weekly VPOC which is confluent with the VWAP close level.

That’s it. I will post all possible updates about this market on our trading forum if you are interested.