In the same way that the USD index is consolidating under major resistance so, too, is the USD/CAD. This pair is trading under a major bear trend line dating back almost 13 years. Any bullish close and hold above this bear trend line would support the triangle breakout move worth up to 2,500 pips.
USD/CAD monthly: showing potential triangle breakout trade and targets:
USD/CAD 4 hr: this chart shows how price is respecting the major trend line, for the time being at least:
The USD/CAD is trading above the Ichimoku Cloud on the 4hr, daily and weekly charts and is moving up through the Cloud on the monthly chart. The top of the monthly Cloud is at around 1.12. It tried to break above the monthly Cloud late last year and might trying for another break soon. Any new bullish break and hold above the monthly Cloud would be the first occasion since 2002!
USD/CAD monthly Cloud:
- the USD/CAD continues to consolidate within a triangle pattern.
- I’m not expecting too much more activity until after FOMC.
- watch trend line breaks to guide here forÂ bearish or bullish breakout moves.
- any sustained bullish breakout suggests a 2,500 pip move.
- watch the 1.12 level as this is the top of the monthly Cloud.