USD/CAD Rising Wedge Breakdown | Bearish Setup Toward 1.3745 Support
Instrument: USD/CAD (U.S. Dollar / Canadian Dollar)
Timeframe: 30-Minute
Date: May 7, 2025
Chart Pattern: Rising Wedge
Trend Bias: Bearish Reversal
🔍 Market Context:
USD/CAD recently rebounded from a support zone around 1.3745, pushing higher into a rising wedge formation. This pattern typically signals a bearish reversal after an upward correction. Price action within the wedge shows decreasing momentum, with higher highs being met by stronger selling pressure.
🧩 Technical Pattern Breakdown:
📐 Rising Wedge Formation
Wedge Boundaries: The price action formed higher highs and higher lows but within converging trendlines — a classic rising wedge structure.
Bearish Bias: Rising wedges are typically bearish patterns, especially when appearing after a downtrend or in the context of a weak bullish correction.
Breakdown Confirmation: Price has broken below the lower wedge boundary, confirming a potential bearish continuation.
📌 Key Technical Levels:
🔹 Resistance Zone:
Ranges from 1.3825 to 1.3840, where multiple rejection wicks confirm strong supply.
The wedge's upper boundary also aligns with this level.
🔹 Support Zone (Target):
1.37458 marked as the target area. It served as a recent strong support zone.
A potential bounce or reversal could occur here.
🔹 TP Zone:
Intermediate take-profit at 1.37644, where price may temporarily stall or retrace before reaching final target.
🔹 SL (Stop-Loss):
Placed above wedge highs at 1.38338, safely beyond recent resistance, preserving risk discipline.
🧠 Trade Setup & Strategy:
Entry:
Entry on breakdown of rising wedge support.
Retest of the broken structure near 1.3777 could offer secondary entry confirmation.
Stop Loss (SL):
Above 1.38338 to protect against invalidation of the wedge breakdown.
Take Profit (TP):
First TP: 1.37644
Final TP: 1.37458
Risk-to-Reward Ratio:
Favorable R:R near 1:2 or better, depending on entry point.
📈 Expected Price Action Path:
Price broke wedge support → signaling downside potential.
Minor consolidation or retest of breakdown may occur.
Bearish continuation toward 1.3745, in line with broader market structure.
🧾 Conclusion:
The USD/CAD is presenting a bearish opportunity following the breakdown of a rising wedge, a reliable reversal signal. With clear structural levels, a tight stop-loss, and defined targets, this setup offers a disciplined shorting opportunity for trend-followers or breakout traders.
Instrument: USD/CAD (U.S. Dollar / Canadian Dollar)
Timeframe: 30-Minute
Date: May 7, 2025
Chart Pattern: Rising Wedge
Trend Bias: Bearish Reversal
🔍 Market Context:
USD/CAD recently rebounded from a support zone around 1.3745, pushing higher into a rising wedge formation. This pattern typically signals a bearish reversal after an upward correction. Price action within the wedge shows decreasing momentum, with higher highs being met by stronger selling pressure.
🧩 Technical Pattern Breakdown:
📐 Rising Wedge Formation
Wedge Boundaries: The price action formed higher highs and higher lows but within converging trendlines — a classic rising wedge structure.
Bearish Bias: Rising wedges are typically bearish patterns, especially when appearing after a downtrend or in the context of a weak bullish correction.
Breakdown Confirmation: Price has broken below the lower wedge boundary, confirming a potential bearish continuation.
📌 Key Technical Levels:
🔹 Resistance Zone:
Ranges from 1.3825 to 1.3840, where multiple rejection wicks confirm strong supply.
The wedge's upper boundary also aligns with this level.
🔹 Support Zone (Target):
1.37458 marked as the target area. It served as a recent strong support zone.
A potential bounce or reversal could occur here.
🔹 TP Zone:
Intermediate take-profit at 1.37644, where price may temporarily stall or retrace before reaching final target.
🔹 SL (Stop-Loss):
Placed above wedge highs at 1.38338, safely beyond recent resistance, preserving risk discipline.
🧠 Trade Setup & Strategy:
Entry:
Entry on breakdown of rising wedge support.
Retest of the broken structure near 1.3777 could offer secondary entry confirmation.
Stop Loss (SL):
Above 1.38338 to protect against invalidation of the wedge breakdown.
Take Profit (TP):
First TP: 1.37644
Final TP: 1.37458
Risk-to-Reward Ratio:
Favorable R:R near 1:2 or better, depending on entry point.
📈 Expected Price Action Path:
Price broke wedge support → signaling downside potential.
Minor consolidation or retest of breakdown may occur.
Bearish continuation toward 1.3745, in line with broader market structure.
🧾 Conclusion:
The USD/CAD is presenting a bearish opportunity following the breakdown of a rising wedge, a reliable reversal signal. With clear structural levels, a tight stop-loss, and defined targets, this setup offers a disciplined shorting opportunity for trend-followers or breakout traders.
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.