The USD/CAD has been shaping up in my preferred chart pattern of a descending wedge for some time now. The upper trend line of this wedge is currently being tested and, with recent US$ strength, this might be worth watching for any momentum-based breakout and mean-reversion move. This week brings NFP so watch to see if this update gets the USD/CAD breaking out at all.

DXY weekly: the US$ index is also trading within a bullish-reversal descending wedge and is currently testing the upper wedge trend line so watch for any momentum breakout here too:

USD/CAD monthly: the 1.30 level looks to be an inflection point of some note for this pair and price is currently below this level:

USD/CAD weekly: note the look of a bullish-reversal descending wedge that captures the recent March 2020-March 2021 swing Low move. The popular 61.8% Fibonacci level is up near 1.38 and would be the main target for any mean-reversion move:

USD/CAD weekly expanded: there isn’t much bullish momentum here just yet; note how the +DMI (green line on the ADX below the chart) is below 20 and trending down. Confidence with any trend line breakout would be boosted when this +DMI is above 20 and trending higher:

USD/CAD daily: bullish +DMI momentum is above 20 and on the rise here:

USD/CAD 4hr: the upper wedge trend line is currently being negotiated on the 4hr chart and there has been recent bullish momentum. Watch for any pause at this resistance level; especially with the wait for this week’s US NFP jobs report:

Final comment:

The USD/CAD has trended lower for the last 12 months and price action is shaping up in a bullish-reversal descending wedge pattern. Bullish momentum has been evident on the 4hr and daily time frame but has not flowed through to the weekly chart just yet. Traders of this currency pair should monitor for any momentum-based weekly chart trend line breakout as this may offer valuable guidance for the trend for this pair over coming weeks and months.

NB: As always, perform your own due diligence, only trade with funds you can afford to lose and manage your risk.