Forex Strategy: USD/CAD Inverted Hammer Hints At Bounce
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- USD/CAD Technical Strategy: Awaiting breakout to confirm directional bias
- Longer-term range on the daily remains in force (1.0900 – 1.1200)
- Breakout from shorter-term consolidation looks imminent
USD/CAD’s recent consolidation between the range top at 1.1200 and 1.0900 handle has continued. The four hour chart reveals that an ascending triangle pattern has formed for the pair with prices heading towards an imminent breakout. An Inverted Hammer candlestick is hinting at a potential bounce which may prompt the impending break to be to the upside above near-term resistance at 1.1115.
However, If a break below trendline support and the nearby at 1.1075 mark occurs, it would suggest a bearish technical bias for the pair and we would likely see buyers emerge near the 1.1050 mark.
Key fundamental event risk lies ahead for the Loonie with the upcoming Bank of Canada rate decision (see the Economic Calendar).
Confirm your chart-based trade setups with the Technical Analyzer.
4 Hour Chart - Created Using FXCM Marketscope 2.0
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by David de Ferranti, Market Analyst, FXCM
Contact and follow David on Twitter: @Davidde
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