WEDNESDAY 19th March 2014 – I’ve spoken on many occasions about the triangle resistance pattern on a weekly time frame on USDJPY. As we all know after the big move from under 0.78 in September 2012 to almost 104.00 by June 2013, it consolidated for most of the rest of 2013 and then finally broke in the direction of the original move in November 2013. This is typical, we get a move and then a flag, pennant or triangle pattern and then typically a break out in the direction of the original move.
So after a large move from under 0.97 in September 2012 to 1.12 in January 2014, USDCAD is now putting in a weekly triangle pattern too except unlike USDJPY is has yet to break out of the pattern. This of course means we do not yet know in which direction it will break. As my bias is for a weaker CAD in 2014 I will only trade this if it breaks to the upside in the direction of the original rising trend. A break to the upside would require a daily close above 1.1152 and a break and close below 1.10 would confirm a break to the downside which as I have said, I will stand aside and not trade. My target for this pair is 1.17 in 2014.
Gary – www.fxlight.co