- USD / CAD draws an ascending wedge bearish reversal pattern on the 1 hour chart.
- A breakout would expose the recent low of 1.2928.
The recovery of USD / CAD from Monday’s low of 1.2928 to 1.3100 has taken the form of a rising wedge pattern according to the 1 hour chart.
A rising wedge comprises converging trend lines connecting rising highs and lows. The converging nature of the trend lines indicates weak bullish momentum. As such, a break to the downside is considered a sign of a bearish reversal.
In this case, a breakout would imply the end of the corrective bounce from 1.2928 and would open the doors for a retest of that level.
However, if the pair moves above the upper end of the ascending wedge, the bearish pattern would reverse and further gains could be seen towards the descending 10-day SMA at 1.3105.
That possibility cannot be ruled out, as the daily chart shows that the pair closed above 1.3051 on Wednesday, confirming a bullish view presented after Tuesday’s inside candle pattern.
USD / CAD 1 hour chart
Credits: Forex Street
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