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USD/CAD "False Breakout" Produces Dark Cloud Cover Pattern

USD/CAD "False Breakout" Produces Dark Cloud Cover Pattern

David de Ferranti, Currency Analyst

Talking Points

  • 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.

USD/CAD: Retreat Indicates ‘False Breakout’

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

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.