USDCAD Bearish Reversal Setup – Supply Zone + Rising Wedge Break1. Chart Pattern
A rising wedge/channel (highlighted in red) is clearly forming, which is typically a bearish reversal pattern.
The pair has reached the upper boundary of the wedge — a strong resistance area.
2. Supply Zone
Marked around the 1.3945 – 1.3981 area.
This is a potential reversal zone, where selling pressure may overpower buying interest.
The price has just entered this zone, indicating a possible short setup.
3. Trade Setup (Short Position)
Entry Point: 1.39431
Stop Loss: 1.39810 – 1.39815 (just above the supply zone)
Target Point: 1.36328
📉 Risk-to-Reward Ratio (RRR)
Risk: ~38 pips (1.3981 - 1.3943)
Reward: ~310 pips (1.3943 - 1.3632)
RRR: ~8:1 – this is an excellent reward-to-risk ratio, making the trade very attractive if the setup confirms.
4. Trend Context
The prior trend before the wedge was bearish.
The wedge appears to be a corrective move, which aligns with the idea of a continuation to the downside.
5. Bearish Confirmation Needed
Ideally, a bearish candlestick pattern (like a pin bar, engulfing, or evening star) inside the supply zone would provide confirmation before entering the short.
📊 Summary of Strategy
Component Value
Trade Direction Short
Entry Price 1.39431
Stop Loss 1.39810
Take Profit 1.36328
Risk/Reward ~1:8
Setup Type Supply Zone Reversal + Rising Wedge Breakout
✅ Pros
High RRR
Strong supply zone
Rising wedge at resistance
Price action supports reversal
⚠️ Risks
If price breaks above the supply zone, the setup becomes invalid
Wait for confirmation before entering (e.g., bearish candlestick pattern)
