USD/CAD Breaks Falling Wedge With Bullish Momentum

In today’s technical spotlight, we’re looking at the American Dollar to Canadian Dollar (USD/CAD), which is showing promising signs of a bullish breakout after weeks of compression.

Since April 15th, the pair had been trapped inside a falling wedge pattern, marked clearly with pink trendlines. This structure was respected with remarkable precision, producing a series of lower highs and lower lows within a narrowing channel — often a setup that precedes a bullish reversal.

The breakout finally occurred after the market close yesterday, with the price escaping to the upside of the wedge. During today’s Asian session, USD/CAD executed a textbook retest of the broken upper wedge boundary, now acting as support. That successful retest confirms the breakout and strengthens the bullish signal.

As long as the price remains above this wedge formation, the sentiment stays positive. The first target lies at the orange horizontal resistance, which aligns with a key supply zone tested multiple times in the past. But if momentum holds, there’s potential for further upside, with a broader grey resistance zone marking the next long-term objective.

A return back inside the wedge would invalidate the current breakout and serve as a sell signal, but given the strength of today’s bounce, the likelihood of that is currently low.

Source: https://www.axiory.com/analytics/technical-analysis/usd-cad-breaks-falling-wedge-with-bullish-momentum