USDCAD, Moving In Wedge Which Can Reverse The Situation!

Hello Traders Investors And Community, welcome to this analysis where we are looking at USDCAD 4-hour timeframe perspective, the recent events, the current formational structure, what to expect the next times, and how to take action appropriate when certain confirmations occur. USDCAD was in a protracted downtrend where it confirmed its lows at the 1.316 level recently, technically this downtrend is still going on on the higher timeframes and the question is now if the price is strong enough to form a reversal or the downtrend will go on further, in this case I detected some signals which providing a better sight into the bullish scenario determining further outcomes of this pair.

Looking at my chart you can watch there that USDCAD is building up a possible descending-wedge formation marked in blue where it already touched the upper and lower boundary several times and forming a wave-count which can have a end sooner or later, currently the pair has found some support at the 1.32 level from where it can bounce and form the wave D finally, this will confirm to the last wave E as it is marked in my chart which needs to bounce of from the lower boundary and form a solid up-move to confirm the overall wedge-formation which will happen with a decisive volatile move above the upper boundary as it is seen marked in my chart.

When USDCAD shows up with the more likely bullish breakout of this wedge and confirmation the breakout can be traded to enter, although the immediate entry within the wedge is also possible waiting on the proper breakout will be much smarter here, when the breakout and confirmation sets in the overall target here will be the blue 200-EMA, for this it is important that there do not enter any solid bearish signals which can invalidate the bullish scenario again, the possibility for this is quite marginal but it should not be ignored especially when USDCAD does not manages to bounce at the lower boundary strongly as it is expected.

In this manner, thank you for watching, support for more market insight, all the best!

Information provided is only educational and should not be used to take action in the market.

Comment:

ANALYSIS UPDATE: USDCAD continued with the completion of the whole descending wedge formation to emerge with a final breakout above the boundary.