USDCAD breakout is coming
So many times USDCAD has proven to be a difficult pair to trade but also very rewarding. As many other pairs affected by the strong USD demand across the market in March, USDCAD has gone to the highest point 1.4660 and since then has reversed lower with two range consolidations for a test of the long-term uptrend line 1.3250, making this unbelievable almost 1400 pips route!
USDCAD is basically giving the most important lesson for every trader that is seriously thinking trading will be his next personal career opportunity. It is patience. Those who have waited for a breakout above the falling trend line in March 2020 above the 1.3500 took an enormous profit from the long trade. As we can see that in the chart we had a painfully long period of consolidation between 1.3000 and 1.3500 and the price broke higher above 1.3500 with the gap up and ADX (Average Directional Index) breaking above 35 with DMI (Directional Movement Index spreading) giving a perfect long trade opportunity.
Now patient traders have the same opportunity! USDCAD is in the falling wedge and has retraced almost 80% of the 1.3000-1.4600 swing upside. ADX is starting to move after a period of a trend downside weakening, and it can indicate two things both extremely important for a good trade. The pair will continue lower below 1.3240 with a strong downtrend momentum, or it will break above 1.3460 also developing a strong trend momentum for a move of at least 300-600 pips! But ina trading above all patience is the most important thing! Look at the ADX to draw a conclusion when the price is close to indicated levels to take action long or short and ride with momentum!
We have used the combination of the top-down trading analysis to get these key levels explained in the charts.
