USD/CAD "False Breakout" Produces Dark Cloud Cover Pattern
- USD/CAD Technical Strategy: Sidelines Preferred
- Dark Cloud Cover Emerges After Dramatic Pullback
- Doji Highlights Reluctance From Traders On H4 Chart
USD/CAD’s retreat back below the 1.1270 barrier has left a Dark Cloud Cover formation in its trail. While the pullback is indicative of a ‘false breakout’ confirmation of the bearish pattern would be required to warn of a deeper setback for the pair. Buying interest is likely to be renewed at 1.1100 floor.
Daily Chart - Created Using FXCM Marketscope 2.0, Volume Indicator Available Here
Similarly, a Dark Cloud Cover pattern on the four hour chart offered an early warning sign that the bears were looking to return to the pair. Yet a more recent Doji candlestick now suggests some indecision near the 1.1265/70 mark. This leaves a more constructive setup desired to offer a clearer directional bias.
USD/CAD: Doji Denotes Indecision In Intraday Trade
4 Hour Chart - Created Using FXCM Marketscope 2.0, Volume Indicator Available Here
By David de Ferranti, Currency Analyst, DailyFX
Follow David on Twitter: @Davidde
To receive David’s analysis directly via email, please sign up here.
Learn how to read candlesticks to help identify trading opportunities with the DailyFX Candlesticks Video Course.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.