Daily Market Commentary: July 26th to 27th 2016

USDCAD :The USD/CAD has finally made a bullish daily-chart breakout from the three month sideways wedge pattern. Traders who missed catching this move will be looking for a pullback test of the broken trend line to then, possibly, join a LONG trade. Wednesday’s FOMC event could be the news item to help trigger US$ volatility and, thus, a possible pullback move on the USD/CAD. Any bullish continuation here though could target 1.40 which is almost 800 pips away and, thus, is a potential trade worth considering.

There has now been a daily candle close above the upper trend line of the three month wedge pattern. Technical analysis would suggest traders look for any pullback to test this trend line to then go LONG. The main calendar item to impact the US$ this week is Wednesday’s FOMC and this has the potential to either undermine or further launch the US$. Traders will be watching to see which way the US$ heads after FOMC and, then, how this impacts price action on the USD/CAD pair. Note how the ADX indicator reveals that this breakout move has evolved with increased bullish momentum:

2016-07-26_LoonieDaily