Possible “hammer” on the USD/CAD

The “hammer” formation is a bullish reversal pattern where the candle has a long lower shadow with a small real body on the upper zone of the candle. The long lower shadow is the key on this pattern, because it tells us that at some point the sellers where having control of the instrument and brought the price down. However, the buyers took control of the instrument and brought the price back up, leaving behind the long lower shadow. On the daily chart of the USD/CAD we can see that Wednesday’s candle has the hammer formation. If this Thursday’s candle closes with a bullish candle, then the hammer formation will be confirmed and the price may change in the direction to the upside. If the price continues going higher, then the next resistance could be the 1.3200 level, followed by the 1.3300 level. To the downside, below the 200 day EMA, blue line, its next supports could be the 1.3047 level or the 1.3000 level.