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A relatively quiet start to the week as it seems all market participants have their eyes set on Wednesday’s Eurogroup meetings and Thursday’s BoE report.
That aside, USDCAD is carving out a nice pattern to keep an eye on over the next few days. The pair has started forming a wedge pattern best seen on the 4 hour chart. It’s coming off of a top that was set at the end of January, which sets a bearish tone for the pattern.
I will say, however, that I’m not a huge fan of trying to short this market given the extreme bullish momentum we’ve witnessed over the past six months. Instead I’m more interested in looking for a buying opportunity in the 1.2115 area.
This area represents the measured objective for the wedge pattern and also acted as key support and resistance between 2008 and 2009.
Summary: Watch for a break of the 4 hour wedge pattern. A move to the downside would find buying interest around the 1.2115 area, at which point we can begin looking for bullish price action. Key resistance comes in at 1.2368.
GBPCAD analysis