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It was a quite day in the market today, with most pairs moving sideways in preparation for their next move. It’s times like this that it’s best to be patient and wait for a clear signal before risking any capital.
One pattern that I’m still watching is the wedge that has been forming on NZDCAD since mid October. So far the market has tested wedge support three times and just put in the third test of resistance last Friday.
This gives us three touches on both support and resistance, which is the minimum required for a tradable pattern. Therefore we can begin watching for a break of support or resistance on a 4 hour basis.
Because this consolidation pattern is coming off of the March high, I’m partial to a break to the downside. That said, it’s important to remain patient and wait for the break before committing to a position.
A look at the weekly chart gives us an idea of where this market may be headed.
NZDCAD weekly chart
Summary: Wait for a break of support or resistance and look to trade this as a wedge breakout. Key support comes in at the September 29th low of .8615. This level also intersects with weekly channel support.
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