Not surprisingly, the U.S. Dollar also surged against its Northern Neighbor, with the rally reaching a high near the round 1.0300 handle before stalling overnight. The sharp move higher, followed by a tight consolidation near the top of the range, has created a Bullish Flag pattern. This pattern indicates brief profit-taking after a sharp move higher, but suggests that a break above the highs would lead to uptrend resumption. With room up to previous resistance at 1.0350, this pattern could form a strong trading opportunity ahead of the weekend.
Specifically, traders could set a stop buy order at 1.0307 (above the round 1.0300 handle) with a stop at 1.0267 (under today’s low) and a target at 1.0347 (just ahead of previous resistance at 1.0350).
This trade would be invalidated by a drop below 1.0267 prior to entry, or if not triggered by the weekend.