USD/CAD Daily Triangle Breakout Points to a Continuation Lower

USD/CAD Key Points

• Huge, higher time frame, USD/CAD daily triangle.
• Triangle broke out to the downside and now retesting previous support as potential resistance.
• Intraday trend change confirmed as price retests previous short term support as resistance.

USD/CAD Technical Analysis

Good morning team.

Back to the good stuff today, with a continuation of the USD/CAD narrative that we've been following. I always find that the majors trade the cleanest in terms of respecting support/resitsance zones and USD/CAD is definitely one of my favourite pairs.

Today's chart of the day comes from a signal that had been on my screen for a few days now. But with price action now showing a nice retest of previous support turned potential resistance, my attention has been well and truly grabbed by the pair once again.

Take a look at the daily chart below:

If you cast your mind back to my last USD/CAD analysis piece (or just click the link above), you'll remember that horizontal resistance zone faking out and then holding for a nice short. Well that fakeout point now forms the top of a triangle and price has continued down, breaking through trend line support.

Price is now currently pulling back up, retesting previous support as potential resistance. With price now within this nice zone on the daily, let's zoom into an intrday chart and see if we can see any sort of trend change.

Here's the hourly:

This is where things get really interesting to me because I can instantly see a way to trade this one. So we have price within a higher time frame resistance zone, while on the intrday charts price has made a lower low and retested an area of short term support which we expect to now act as resistance.

If we want to attack this setup aggressively, this short term resistance zone allows us to keep our stop tight, while for the conservative traders amongst us, this turn is close enough to the top of the higher time frame resistance zone to allow it some room and still be a worthwhile trade.

Best of probabilities to you.

Dane.

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