First some background, the Canadian dollar has been a well defined downtrend since the 18th of May last year. Switch the USDCAD chart to the daily chart, and you will see that trend line drawn from it's peak in May was most recently respected as recent as the 10th of January, this gives me a downside bias to intraday formations.

The formation I have marked above is a descending triangle, formed by two 1H trend lines. The textbook definition of a descending triangle means the bottom trend line should be flat, but, with the daily downside bias, and the slightly steeper upper trend line, I am happy to treat this as a descending, rather than an equilateral triangle. Why does it matter? A triangle formation occurs when there is indicision where traders want prices to go, as we move closer to the apex of the triangle, the range gets smaller and smaller while people either wait to see which way things go, or they make up their minds. If it is an equalateral triangle, there is an equal chance of a break either way, where-as a descending triangle gives downside pressure as the pushes higher are getting less and less powerful.

It's for this reason, I will be looking for a downside 1H close below the lower trendline, and more than likely will wait for a retracement back to retest the lower line to enter short. Of course an upside break is just as valid, but I will wait for further confirmation before going long.

On another note, the Weekend Wonder on the GBPUSD acted out just as we hoped, my entry was short at 1.7784, currently at +100 or so and holding, more on that tomorrow once the trade is complete.

Happy trading!