USD/CAD Price Analysis: Air-kissing the Ascending Wedge goodbye
- USD/CAD broke out of a bearish wedge pattern it has been rising in during 2024.
- It stopped its downtrend, however, and returned back up to retest the lower borderline.
- This is likely a final test “goodbye”· before the pair resumes its bear move.
USD/CAD has recently broken out of the Ascending Wedge pattern which it has been forming since January.
US Dollar versus Canadian Dollar: 4-hour chart
Downside following the breakout was curtailed and the pair turned around and climbed back up to the lower borderline of the wedge, where it currently trades.
It is not uncommon for price to return to a trendline for a final retest before pushing lower again, and this is what is probably happening on USD/CAD.
The pair will probably “air-kiss” the borderline “goodbye”, therefore, before resuming its move lower. Bearish confirmation would probably come with a break below the last swing low at around 1.3466.
The height of the wedge at its widest point extrapolated lower offers an eventual target for the downside move at 1.3302.
For the cautious, more conservative estimates would be the low of the wedge at 1.3358, or possibly even the Fibonacci 0.618 ratio of the pattern’s height at 1.3374.
On the other hand, a break back inside the wedge pattern and above 1.3526 would cancel out the bearish view and suggest a bullish reversal was taking place.
Author
Joaquin Monfort
FXStreet
Joaquin Monfort is a financial writer and analyst with over 10 years experience writing about financial markets and alt data. He holds a degree in Anthropology from London University and a Diploma in Technical analysis.
