USD/CAD short-term technicals turning bearish
The Canadian dollar has been choppy, but with a breakdown unfolding it appears to be heading for selling in the near term.
USD/CAD technical outlook
- Canadian dollar looking headed higher versus US dollar
- USD/CAD wedge break on the four-hour time frame
Canadian dollar heading higher versus US dollar
USD/CAD has been a difficult handle as of late, with choppy price action dominating the landscape. The pair has been trading in an upward channel on the daily time frame, which provided a bullish tilt, but that is quickly changing with the break of the underside trendline.
The 200-day moving average (MA) has been running through the past two weeks’ worth of price swings, helping further the notion that a breakout will bring some power as the price gets separation from the long-term average.
USD/CAD daily chart (channel broken, 2012 t-line in focus now)
Dialing in on the four-hour time frame, we can see the ascending wedge breaking. The pattern suggested a bullish break was nearing, but it’s showing now why it is important to wait for a confirmed breakout as the formation could resolve itself lower as it is now.
Tactically speaking, with the underside line broken and $1.3250 giving way, as well look for momentum to potentially take USD/CAD down to the 2012 trendline near $1.3000. It may take a little time to get there, but the path has so far been started. To negate the breakdown, it will take some work on the upside before turning the picture bullish.
USD/CAD four-hour chart (bearish wedge-break)
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