USD/CAD Looking at the Forest not the Leaves (detailed analysis)

FX:USDCAD   U.S. Dollar/Canadian Dollar
24 0 0
Here there are the channels the USDCAD             has been following ( daily chart ). Channels are extremely important tools in technical analysis , if not the most important. In order to understand where the market is going, there is no other way but to analyze the trends. They are important for one reason as they objectively tell you the changing mood in the markets. They indicate market turns, exhaustion, accumulation to name the few.
When we look at current situation at USDCAD             pair, we see 3 important trends and their channels. I have marked them up as Channel 1,2 and 3 respectively. The larger the trend, the more important it is. Currently, USDCAD             prices are at the upper channel line of Trend#1, which translates to channel resistance. The second channel (channel#2 in dark blue) is a wedge formation and indicates a weakness. The third channel was a trend which was a sign for weakness, as it formed once the channel#2 (dark blue) was broken (i.e.failed). Now this channel#3 is also broken (failed) since 3 days.
What does all this mean? Those channel (i.e. trend) indications FIRMLY indicate that there is WEAKNESS and it is highly unlikely that the prices go higher from this point on. Having a weakness established by Channels #2,3 at the upper trend channel#1 shows us that a breakout in the up direction is highly unlikely.
We shall not expect a clean cut and fast down turn though, because 1- Market is highly Volatile and 2- there are bunch of resistance levels holding the prices to slip further down. Therefore a gradual decline following a channel should be expected from this point on. Short term traders can profit from the swings, especially taking short positions on this declining channel. The final target is 1.28, where the major 4th wave shall terminate. Good luck
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