I noted back in September 2014 about a potential 2,500 pips triangle breakout building on the USD/CAD monthly chart. This move has completed now and price action has stalled at a major monthly Fibonacci level. In this post I review this trade signal and note the current chart action.
The USD/CAD began testing a major monthly chart triangle trend line back in September 2014. This is how the monthly chart appeared back then near the breakout:
The bullish target for this triangle breakout was 2,500 pips and this dove-tailed in with a move back up to the 61.8% of the 2001-2007 swing-low move:
Triangle breakout target: The Loonie had previously broken up and out from a major monthly chart triangle pattern that was identified to deliver up to 2,500 pips and this move has now, essentially, completed! This 2,500 pip figure was evaluated from the height of the triangle. I used the triangle height from the beginning of the bull trend line, as shown in the monthly chart below. The height of the triangle was around 2,500 pips and, thus, this would be the expected move from any breakout action. Extrapolating a bullish move from this triangle placed price up at the 61.8% fib level. These fibs levels are popular targets in retracement moves and so this added more confluence to this as a possible target.
Triangle move completed: The bullish move has peaked up at the 61.8% fib, has given almost 2,500 pips and has now essentially completed.
Where is price now: price action has stalled under the 61.8% fib from that 2001-2007 swing-low move. These Fibonacci levels are major regions and price action, whilst it has been choppy under here for the last five weeks, may continue to be choppy whilst it negotiates this region:
Where to next? I am now on the lookout for yet another monthly-chart based technical pattern on the USD/CAD and this is a bullish Cup ‘n’ Handle up from the 1.30 level. The point of confluence here is that the target for this bullish move would be up at the 100% fib for the 2001-2007 swing-low move. There may be some extended choppy action here for a while to help form up a ‘Handle’ to go with this ‘Cup’ pattern, so, be prepared for this:
Summary: the 2,500 pip triangle breakout move charted here back in late 2014 has now completed. Watch for any developing bullish Cup ‘n’ Handle pattern though as this has a target move of 3,500 pips. Catching even just a small section of this would be very profitable