USDCAD: textbook upswing

After scanning all instruments available on our platform, there is one where the technical situation looks the most promising. This instrument is the USDCAD, where buyers have a huge chance of success. It doesn’t look bad from a fundamental point of view either. The current risk off mode favours buyers, so in this case, both dominant ways of analysing the market are positive.

For USDCAD, it all started in February when the pair bounced from the long-term upwards trend line (black) using the inverse head and shoulders pattern (red neckline). After this formation, we went higher and created a symmetrical triangle formation (green line). The triangle also resulted in a rise, giving us a buy signal. Most recently, the upper line of the triangle was tested as a support, giving us another bounce, and in other words – bullish confirmation.

To sum up, trend is bullish and two recent technical formations were bullish too. There’s currently no sign of a reversal, so objectively, we have a higher chance of an upswing than we do for a drop. The long-term buy signal is present here as long as the price is above the black line. Only USDCAD closing the day below this long-term upwards trend line will be an invitation to go short.

Source: Alpari