USD/CAD Forecast: Falling Wedge Confirmed, 1.24 In Focus

• The USD/CAD pair is expected to grow after confirming the Falling Wedge reversal pattern.
• A new higher high could activate further growth in the short term.
• The pair could be attracted by the upper median line of the descending pitchfork after failing to reach the median line. 

The USD/CAD forecast sees the pair dropping a little today as the price wanted to retest the broken resistance.

Forex traders should be aware that the price action developed a reversal pattern, so an upside movement is in cards. In the short term, the volatility is high after the Canadian and the US economic data. Personally, I’ll wait for the markets to calm down before taking action again.

From the technical point of view, the USD/CAD pair signalled that the downside movement was over and that the bulls could take the lead again.

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The Loonie is bullish right now, it has received a helping hand from the Canadian Retail Sales which has registered  a 2.1% growth in August versus 2.0% expected, while the Core Retail Sales rose by 2.8% beating the 2.6% forecast and after a 0.4% drop in July. 

On the other hand, the United States data have come in mixed. The Flash Services PMI  jumped higher than expected, from 54.9 to 58.2 points exceeding the 55.3 estimate. Unfortunately for the US Dollar, the Flash Manufacturing PMI dropped from 60.7 to 59.2 points, far below 60.5 points expected. 

Also, you should be careful as the Fed Chair Powell Speaks brought huge volatility into the markets. 

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USD/CAD Forecast: Price Technical Analysis – Bullish Reversal!

 

The USD/CAD pair has decreased to retest the Falling Wedge’s resistance. Escaping from this pattern signalled potential growth. Its false breakdown with great separation below the 1.23 psychological level and through the weekly S1 (1.2295) signalled that we may have a leg higher soon.

1.2422 former support (support turned into resistance) is seen as a potential upside target if the rate comes back higher. The price’s failure to approach and reach the descending pitchfork’s median line signalled that we may have a rebound towards the upper median line.

Technically, when the price fails to reach a median line, it will move in the opposite direction. 1.2308 – 1.2302 area stands as a major support area. A new higher high, a bullish closure above 1.2383 could activate a strong in the short term. 

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