USD/CAD Suffers A "False Breakout" As A Harami Warns of Weakness

Talking Points

  • USD/CAD Technical Strategy: Sidelines Preferred
  • Harami Confirmation Suggests Declines May Continue
  • “False Breakout” Casts Risks Lower To 1.0854

USD/CAD has been sent reeling following the emergence of a Harami pattern on the daily. The key reversal pattern and daily close below the 1.0980/1.1000 barrier warn of further short-term weakness for the pair. Yet within the context of a longer-term uptrend a pullback to the 1.0854 floor would be seen as a buying opportunity at this stage.

USD/CAD: Harami Delivers Drop Below “Breakout” Point

USD/CAD Suffers A False Breakout As A Harami Warns of Weakness

Daily Chart – Created Using FXCM Marketscope 2.0, Volume Indicator Available Here

The four hour chart reveals an absence of bullish reversal signals at this stage. This suggests the chances of an intraday recovery may be slim. A continued correction is likely to be met by buying interest at the 1.0936 floor.

USD/CAD: Recovery Hopes Appear Slim Amid Void of Bullish Candlesticks

USD/CAD Suffers A False Breakout As A Harami Warns of Weakness

4 Hour Chart – Created Using FXCM Marketscope 2.0, Volume Indicator Available Here

By David de Ferranti, Currency Analyst, DailyFX

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