USD/CAD Forms Triangle as Intraday Charts Congest

Crude oil has slowly been moving higher as prices have reached a new annual high.  The $74/barrel level has been broken during the last weeks of summer which leaves two points to consider.  The higher equities market is creating buying support for crude as the lower U.S. Dollar value is pushing crude prices higher.  While it's probably a little of both, the USD/CAD is often one of the best pairs to capitalize on  for crude oil movement.

The short term intraday chart patterns (15 minute, 30 minute and 60 minute) of the USD/CAD are congesting as the market cycles are sideways on these time frames.  The 30 and 60 minute chart patterns project a flat sideways market cycle.  The symmetrical triangles that have formed could be an excellent opportunity to play out a breakout/breakdown scenario which is also known as an Autochartist Initial Movement ("AIM") entry.

Note how the congestion is squeezing prices between the uptrend support line (Z) and the downtrend resistance line (Y).  The Initial Trend (X) is also low which confirms the sideways market movement.  All that is left is to wait for prices to pierce the uptrend support line or downtrend resistance line and thereby trigger a momentum entry.  The Continuation Triangle alert on this 60 minute chart pattern will most likely break lower as crude oil rallies and/or the U.S. Dollar falls.  The break higher will happen if the U.S. Dollar rallies.  Keep in mind that the breakout also has to contend with the 1.0800 major psychological level if it is to follow-through.

For further information on this and other chart patterns visit www.autochartist.com