USDCAD: 700-Pip Move on the Horizon?

by Justin Bennett  · 

August 31, 2018

by Justin Bennett  · 

August 31, 2018

by Justin Bennett  · 

August 31, 2018


[thrive_custom_box title=”” style=”dark” type=”color” color=”#fef5c4″ border=”fadf98″]

Important: I use New York close charts so that each 24-hour period closes at 5 pm EST.

Click here to get access to the same charts I use.

[/thrive_custom_box]

I haven’t paid much attention to the USDCAD lately and for good reason. The price action so far in 2018 has been choppy, particularly the period between late April and early June.

However, since topping out a couple months ago at 1.3385, the pair has formed what appears to be a bull flag. We know it’s a descending channel, and given the uptrend since September 2017, it makes sense to view it as a (pending) bullish continuation pattern.

On top of that, the USDCAD is forming a bullish pin bar on the weekly time frame. It’s a little early to label it as such given how much time is left in today’s session, but if buyers can close it above 1.3040, things start to look relatively constructive for next week.

What’s interesting about this possible bull flag is its measured objective. The height of the flagpole that began with the April low and stretches to the June high is 860 pips.

If this week’s low at 1.2887 is indeed the low of this channel, it places the objective at 1.3750 or thereabouts. Once identified, the next thing I like to do is zoom out to see if there’s anything special about the 1.3750 area.

As soon as you do that, you’ll notice that 1.3750 is the closing price of the 2017 high. That could be pure coincidence, or it may signal that the pair is gearing up for a multi-week and perhaps multi-month ascension to 1.3750.

Buyers have their work cut out for them though. Before we can even think of buying the USDCAD, we need to see a daily close (New York 5 pm EST) above channel resistance near 1.3090.

Until that occurs, the pair will remain under pressure. I would like to see this week’s low of 1.2887 hold though. If that support level were to break, I would begin to question the integrity of this bullish continuation pattern.

A daily close above channel resistance near 1.3090 would target the year to date high at 1.3385. A close above that would expose 1.3585 followed by the measured objective near 1.3750.

Alternatively, a move below this week’s low of 1.2887 would begin to challenge the notion that this is a bull flag pattern.

[thrive_custom_box title=”” style=”dark” type=”color” color=”#fef5c4″ border=”fadf98″]

Want to Learn Step-By-Step How I Swing Trade the Forex Market?

Click Here to Register for the Free Webinar!

[/thrive_custom_box]

USDCAD channel


Continue Learning


Leave a Reply

Your email address will not be published. Required fields are marked *

  1. Thank you so much Justin, that you give all this for free. I hope i can soon be a member of your class. You help me so much.Have nice weekend.

{"email":"Email address invalid","url":"Website address invalid","required":"Required field missing"}