We are in the midst of a powerful reversal in USD/CAD.
After breaking key support at 1.0406 and falling as low as 1.0367, we have seen an immediate and powerful reversal to as high as 1.0578 today — a more than 200 pip move in just over 24 hours.
The reversal has created a bullish reversal pattern on the daily chart.
The final three candlesticks create a textbook hammer reversal pattern that is confirmed by a bullish engulfing candle. Reversal patterns really don’t come any more clearly than this one but further confirmation would come with a close above 1.0509. If that’s the case, a retest of the top of the range at 1.0750 will be the favoured scenario.