USDCAD continues trading in a triangle
09 February 2023
In today’s analysis, we have a quick update on the USDCAD situation getting closer to a major, long-term trading signal. Tomorrow, we will receive data from the Canadian job market whose numbers might grease the price and increase the momentum needed for a breakout.
What breakout, though? Since September, USDCAD has been in a long-term symmetrical triangle pattern (black lines). Price swings are getting smaller and the two lines of the triangle are getting closer. This is a great occasion for the price action traders awaiting a trading signal. With triangles, it works like this: the price breaking the upper line of the triangle is usually a signal to buy and the price breaking the lower line of the triangle is usually a signal to sell. In case of the first option, the upswing would be quite simple but with the bearish option, the situation gets more complicated.
The reason for that is the lower line of the triangle above the horizontal support on the 1.322 (yellow). We are also above the upper line of the channel up formation (blue) that was with us throughout 2021. All that acts as strengthening of the support, which can make a bearish breakout more difficult. That being said, my current view on the USDCAD is positive and I expect the price to break the upper line of the triangle soon.