AUDUSD & USDCAD Charts Wedging Up on Varying Time-frames

AUDUSD/USDCAD Chart Highlights:

• AUDUSD channel inside weekly triangle
• USDCAD forming a triangle within upward channel

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AUDUSD channel inside weekly triangle

AUDUSD has been a real grind along with most of the major FX world. The size of the 3-month range when adjusted for 52-week volatility is in the bottom 16% when looking back over the past five years. While small, it can get smaller with some room to go before the apex of a developing wedge is met.

The descending wedge on the weekly chart (excluding the flash-crash low) is in-line with the broader trend lower since the beginning of last year, suggesting we are more likely to see a downside break. Cracking the 7000-mark will be the key for Aussie to really start rolling downhill again.

Shorter-term, there is a channel developing within the wedge. This structure can be used as a guide for fades on the top and bottom-side for as long as it holds. The bottom-side parallel is anticipated to give-way at some point fairly soon, though.

AUDUSD Weekly Chart (Descending wedge forming)

AUDUSD Daily Chart (Trading inside channel)

Q2 US Dollar Forecast

USDCAD forming a triangle within upward channel

Choppy trading in USDCAD has created the narrowest 3-month range (adjusted to 52-week vol) since October. We are also seeing this range tighten on the daily time-frame into a triangle formation. Giving the benefit of the doubt to the upward slope of the channel in place since September 2017, an upside break is anticipated not too long from now. A breakout should have the 13600s in play relatively quickly. To turn USDCAD negative, broadly speaking, a breakdown out of the channel and below the yearly low at 13068 will be needed.

USDCAD Weekly Chart (narrow range within upward channel)

USDCAD Daily Chart (triangle forming)

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---Written by Paul Robinson, Market Analyst

You can follow Paul on Twitter at @PaulRobinsonFX