USD/CAD Bearish Inside Bar Breakout
- The USD/CAD Initially Moves Higher on Unemployment Data
- Bearish Inside Bar Breakouts Begin Under 1.3228
- SSI Reads Positive at +1.68
(Created using Marketscope 2.0 Charts)
Interested in Learning the Traits of a Successful Trader? Click HERE
The USD/CAD has continued to consolidate this morning, after bouncing off its lows during today’s Canadian Unemployment data release. Unemployment figures were expected to come in at 7.2%, however they posted worse than expected at 7.3%. This information at least temporarily staved the USD/CAD from breaking out beneath Wednesday’s low of 1.1328.
Now today’s price action is attempting to breakout from the inside bar pattern depicted above. While Wednesday’s high of 1.3446 was acting as resistance for the pair, the previous monthly low at 1.3228 was acting as support. This breakout towards lower lows is significant as it symbolizes new bearish momentum for the USD/CAD. Traders looking to join the trend may now plan to enter the market on new Canadian Dollar strength.
Traders looking to set targets for today’s inside bar breakout, can use ATR (Average True Range) to gauge potential pricing targets. Daily ATR for the USD/CAD reads at .0141 or 141 pips. This places initial targets for a bearish breakout below support near 1.3087. Alternatively, if prices reverse higher, bullish breakouts above resistance may target a price of 1.3587.
SSI (Speculative Sentiment Index) for the USD/CAD is reading at +1.68. While this value is not extreme, it positive reading suggests future declines for the USD/CAD. In the event of a continued bearish move lower, traders should look for this value to increase. However, in the event of a bullish price reversal, SSI should return toward values that are more neutral.
To Receive Walkers’ analysis directly via email, please SIGN UP HERE
See Walker’s most recent articles at his Bio Page.
Do you know the biggest mistake traders make? More importantly, do you know how to overcome the biggest mistake? Read page 8 of the Traits of Successful Traders Guide to find out [free registration required].
Contact and Follow Walker on Twitter @WEnglandFX.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.