USD/CAD: finally got the wedge breakout

The USD/CAD has finally made a bullish daily chart breakout from the three-month sideways wedge pattern. Traders who missed catching this move will be looking for a pullback test of the broken trend line to then, possibly, join a LONG trade. Wednesday’s FOMC event could be the news item to help trigger US$ volatility and, thus, a possible pullback move on the USD/CAD. Any bullish continuation here though could target 1.40 which is almost 800 pips away and, thus, is a potential trade worth considering.

USD/CAD daily: there has now been a daily candle close above the upper trend line of the three month wedge pattern. Technical analysis would suggest traders look for any pullback to test this trend line to then go LONG. The main calendar item to impact the US$ this week is Wednesday’s FOMC and this has the potential to either undermine or further launch the US$. Traders will be watching to see which way the US$ heads after FOMC and, then, how this impacts price action on the USD/CAD pair. Note how the ADX indicator reveals that this breakout move has evolved with increased bullish momentum:

LoonieDaily

Compare this to the he daily chart after Friday’s close that did not have the support of the ADX:

LoonieDaily

USD/CAD 4hr: the 4hr chart shows how there was a breakout and pullback before eventual continuation. Will we see the same happen on the daily chart though?

Loonie4hr

USD/CAD weekly: there isn’t much ADX support on the weekly chart just yet.

LoonieWeekly

USD/CAD monthly: Is this the move away from the 1.30 level that I’ve been waiting for?

LoonieMonthly

USDX weekly: Any continued bullish momentum on the USDX will help to support the bullish move on the USD/CAD. There is FOMC this week though so watch for any impact from this event to impact both the US$ and USD/CAD. Any bearish US$ outcome from FOMC may undermine the bullish USD/CAD action and give a pullback to the wedge trend line or even the key 1.30 level.

USDXweekly

Oil: the weaker Oil price has helped to support the USD/CAD and Oil may even offer more support in the sessions to come. I’m reading that the stronger US$ is putting pressure on Oil as well as talk of a global supply glut. Either way, there has been a technical trend line breakdown on the daily chart of Oil plus a break below the daily Cloud; both events of which are bearish. As well, the weekly chart shows a bullish-reversal ‘Inverse H&S’ building and I have been looking for a test of the $40 level to help validate this pattern.

Oil daily: there has been a bearish trend line break with today’s daily candle:

OilDaily

Oil daily Cloud: a bearish break below the Cloud:

OilDailyCloud

Oil weekly: a bullish-reversal ‘Inverse H&S’ is in play here. Watch for any test of $40 to help validate this pattern.

OilWeekly

Bullish targets for any continuation move?

The obvious targets would be the whole number levels but placing fibs on the daily chart also offers some target levels. The 1.40 level would be an obvious target as it is a whole number and previous long-term S/R level (check back on the monthly chart) and is located in between the 61.8% and 78.6% fib levels:

LoonieDaily

Summary: The USD/CAD has finally made a daily-chart bullish wedge breakout move after almost three months of sideways choppy price action around the key 1.30 level. Traders need to be cautious ahead of Wednesday’s FOMC though in case any US$ volatility triggers spike movement on the USD/CAD price action. A pullback with price on the USD/CAD to test the breakout trend line would offer bullish traders an opportunity to enter this trade at a better price. However, continued bullish US$ action and Oil price weakness may hinder the opportunity for any pullback. One possible bullish target is almost 800 pips away at 1.40 and so this could be a move trying to catch!

Bullish for USD/CAD:

  • continued bullish momentum on the US$ index.
  • continued weakness with the Oil price.

Bearish for USD/CAD:

  • renewed bearish momentum on the US$ index.
  • bullish reversal with the Oil price.

The post USD/CAD: finally got the wedge breakout. appeared first on Trade Charting.

The post USD/CAD: finally got the wedge breakout. appeared first on www.forextell.com.

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