USD/CAD Retreating from a False Bullish Breakout

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USD/CAD Retreating from a False Bullish Breakout

The USD/CAD made a bullish breakout this week from a descending triangle. However, this breakout is now being invalidated. Let’s take a look at the chart.

The triangle breakout in the 4H USD/CAD chart is now turning into a bearish attempt pressuring the 1.2350-1.24 triangle consolidation support area. After a false breakout to the upside, the support is vulnerable. A break below 1.2350 opens up the 1.20 handle.

If price rebounds above 1.25, the bullish outlook is still in sight, not because of this week’s bullish breakout, but because of the prevailing uptrend. The 1.28 high will be in sight, and above that the 1.30-1.3060 area, 2008-2009 highs will be sight.

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Fan Yang has been a professional forex trader and analyst since 2007. He specializes in technical analysis and has a Chartered Market Technician designation since 2011. He was the chief technical strategist at CMSFX He was also the founder and chief currency strategist at FXTimes Over the years, Fan has not only been a trader and analyst but also an educator. As a proponent of both technical and fundamental analysis in trading, Fan advocates simplicity and discipline as key factors in making trading decisions when faced with so many "clues" and "signals". Currently Fan Yang is the chief currency analyst and webinar instructor at forexminute.com.