Wednesday, February 28, 2018

USD/CAD Is Developing A Pennant

USD/CAD is heading for the resistance trend line (in red) around 1.3050 – 1.3100.

The figure that has formed strongly resembles a pennant with its flagpole and four points at which the pair has reached the trend lines, two at the resistance and two at the support. The pennant is a trend continuation figure, which means that there should be a breakout above the resistance trend line and in that case its limit should be over 2200 pips.

In my opinion, however, the figure will continue developing and once the pair reaches the resistance it should reverse and renew its depreciation to the support trend line.

For how, I think, the target is clear – there will be another rally for 150 – 180 pips after which we should watch closely how the pair will behave once it reaches the resistance trend line.