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USDCAD Gearing to Move Higher Next Week?

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The USDCAD has been slow to develop since its recent parabolic move.

Following the March rally that took the pair over 1,000 pips higher in just eight days, the price action has been subdued.

Consolidation like this after a massive rally isn’t surprising, though.

A market needs time to shake out weak hands if it intends to rally further.

Consolidation, like we’ve seen from USDCAD recently, is a requirement for me to consider playing the next leg.

Furthermore, as you can see from the chart below, the USDCAD has carved what appears to be a bullish flag pattern.

It isn’t what I would consider a conventional pattern as bull flags usually develop from the recent peak.

However, the extreme volatility in late March probably has something to do with that.

I shared this pattern with DPA members on Tuesday before the most recent test of channel resistance.

As anticipated, the USDCAD encountered selling pressure at 1.4140.

That’s the top of this descending channel, or at least it was on Thursday.

So, where does USDCAD go from here?

Do we get an immediate breakout, or another pullback first?

While there are no guarantees, the price action since mid-April leads me to believe a breakout isn’t far away.

Notice the higher lows as USDCAD pushes against channel resistance.

That’s a sign of increased demand.

But regardless of what USDCAD has done recently, buyers need to secure a daily close above the channel top near 1.4130/40 to confirm the breakout.

Until then, expect this consolidation to continue.

Key support comes in at 1.3850.

A daily close above channel resistance would expose 1.4340, 1.4660, and perhaps the 1.5100 area.

The measured objective for this structure is 1.5500.

Want to watch the USDCAD video I just released in the member’s area?

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USDCAD descending channel on the daily chart
USDCAD daily time frame

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12 comments
Justin Bennett says

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Chukwuemeka says

Your post are very educative and profitable at the same time keep up the good work

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Samuel says

Thanks for the updates please.

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Muhsin mohamed says

My be usdcad is buy because it set up bullish flag

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Muhsin mohamed says

Hi iam from Somalia🇸🇴🇸🇴 please add in your vip channel on your you tube i see your YouTube but the vidio is hide to tolking USDCAd please add

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Christopher Coyle says

Nice call Justin. Any Elliot technicians out there…what wave count is the break out ?

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Matthew says

Thanks for your analysis Justin!

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Ngo Sy Ha says

thanks you for analys

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Eric says

I don’t see this one as a channel. I understand your analysis, but I see a Symetrical Triangle.

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    Samir says

    I see what you are saying, i made my markings on the chart much the same way about two weeks ago when price was on the 50EMA on the daily timeframe, but even then it is a terminal pattern that looks to be at an end and ready for a move higher

    Reply
sunday says

Thanks Justin

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Rooholah says

Hi Justin
i think it is going to 1.3490

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