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A period of consolidation since late January may precede a renewed push higher from the US Dollar against its Canadian counterpart. Sideways trade is taking the shape of a Triangle chart formation, a setup typically indicative of trend continuation (which carries upside implications in this case). A break above the Triangle top at 1.1170 aims for recent swing highs in the 1.1194-1.1223 area. Alternatively, a break below support at 1.0969 marked by the Triangle bottom and a rising trend line set from late October exposes the 38.2% Fibonacci retracement at 1.0825.
The Triangle setup is not actionable until confirmation is seen on a daily close above the pattern’s upper boundary. We look for that to materialize before looking for an attractive long trade setup.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com