Canadian Dollar Forecast: USD/CAD Falling Wedge Threatens Reversal

10 and one 10 us dollar bill


  • As looked at in yesterday’s webinar, USD/CAD has built into a falling wedge formation.
  • Falling wedges will often be approached with the aim of bullish reversals, and USD/CAD has already jumped up to the first resistance level looked at yesterday.
  • The analysis contained in article relies on price action and chart formations. To learn more about price action or chart patterns, or the falling wedge shown in USD/CAD, check out our DailyFX Education section.

It’s been a day of strength for USD/CAD which may come as a surprise given that he currency pair pushed down to a fresh two-year-low earlier this morning. But, as USD-strength has begun to filter in, USD/CAD has rallied up to find a bit of resistance from a prior batch of swing lows.

This resistance was highlighted in yesterday’s webinar, and plots around the 1.2719 area on the chart. This was a batch of support in early-mid December and, so far this morning, sellers have been able to defend this line in the sand following the pair’s bullish burst.




USDCAD Two Hour Price Chart

Chart prepared by James StanleyUSDCAD on Tradingview


Also highlighted in yesterday’s webinar is the slightly bigger picture context in the pair; in which the build of a falling wedge formation threatens the possibility of a pullback. As both USD and USD/CAD have been showing varying oversold conditions, the appearance of this formation highlights the fact that sellers may be preparing to take a back seat, at least temporarily.

Falling wedges are often approached with the aim of bullish reversals; and the levels looked at yesterday were 1.2719 (already in play), 1.2791 (the Monday swing high) followed by 1.2922 (the November swing-low).

To learn more about falling wedge patterns and how traders can incorporate them into their strategies, join us in DailyFX Education

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