USD/CAD: Rising wedge could derail the current uptrend
|What happened at the end of last week trading session
USD/CAD: The US dollar finished strong after exploding from its 500 EMA ending last week session at 1.31356. The pair also finished in a rising wedge price pattern which indicates to weakness to the upside.
What is going on now
USD/CAD: The US dollar started the session high at 1.31630 but retreated and bounced at 1.31448 support. The pair is currently trading at 1.31535 after retreating to 1.31448 for the second time in today's session. USD/CAD now consolidates at 1.31670 resistance and 1.31448 as prices move towards the top of the wedge and continue to be squeezed. It would continue until it breaks.
My thoughts on what may happen
1. USD/CAD: The pair has reached the top of the rising wedge price pattern and has started to confirm weakness to the upside in short and medium-term price range and could fall if it fails to hold at 1.31448. The breakout point to the downside is estimated at 1.31448 and to the upside is at around 1.31670. If it falls below 1.31448 then the first support is estimated at 1.31275. If it fails again at 1.31275 then the pair could possibly freefall to around 1.31032 support.
2. It is a good practice to apply a stop loss to all your trades to protect your capital in case the market moves against your position.
The short-term view of the price action in the 60 minutes price chart highlights the direction of the trend and support and resistance price points
The short-term view of the price action in the four-hour price chart highlights the direction of the trend and the support and resistance price points
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