USD/CAD Technical Outlook
- USD/CAD trading around resistance, may break through soon
- Short-term wedge pattern break failing back to the upside
USD/CAD Technical Outlook: Trying to Peel Through Substantial Resistance
The other day I was discussing the rising wedge formation on the 4-hr chart and the confluence of resistance running over from July. The wedge initially broke to the downside, drawing in sellers, but is quickly proving to be a false break.
This type of price action around a key level isn’t uncommon and could send the price of USD/CAD higher here shortly. The area right around 12807/25 is a strong level of resistance, with three highs or closes within that tiny pip range.
We have seen price struggle around this range the past few days. At first with the wedge breaking it was viewed as likely to stay in place, however, with the wedge breakdown proving false and USD/CAD hanging around it is beginning to look like higher levels ahead.
If we see some separation from resistance, then the 12950 level becomes the next major point of contention. This level dates to just before the pandemic turned the world upside down and was validated on a few occasions since. The most recent event was the powerful reversal in August.
On the upside, once (if) some separation can develop then there is a little room for bullish traders to work with before we will have to carefully monitor price behavior at the next key level. If we see USD/CAD turn down again here soon, then we could see some selling set in, but it’s beginning to feel like the more difficult path to trade at this time.
USD/CAD Daily Chart
USD/CAD 4-hr Chart
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX
