Today the Canadian Dollar futures completed the move out of the falling wedge pattern I identified last week (see here).Let’s look at the chart to see how to look for this setup.
The falling wedge pattern is the two declining red lines on the chart.It illustrates a series of declining highs and lows, along with narrowing ranges as the pattern progresses. It shows declining bearish interest in a downtrend, and forecasts a trend change and rally.
For this pattern, a long entry is triggered when the market breaks the line across the tops; for this trade, that meant you would have bought on Monday when it cleared 8629 on Monday. Today it reached the wedge price objective, the top of the wedge, at 8907. 8903 was a 50% retracement of the June/July selloff, giving this level more significance. Note that MACD had a bullish crossover yesterday. The crossover, plus a close over the 8903 Fibonacci level, could mean there’s more rally to go here.
That’s what a falling wedge tells you
Looking ahead, does this look like the same sort of setup in September Coffee?
Is this a wedge in coffee?
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