Since the USD/CAD pair failed to show enough bullish momentum above 1.1200 during the last visit on March 20, the pair has been downtrending within the depicted bearish channel, which managed to push towards the price zone between 1.0910-1.0850 (50-61.8% Fibonacci levels on the daily chart) where a prominent congestion zone was established.
Bullish rejection was expressed at retesting the lower limit of the bearish channel around 1.0630 (It's the origin of the previous bullish impulse initiated in December 2013 as well). This enabled the bulls to achieve a bullish breakout off the depicted channel.
The USD/CAD pair has a strong resistance zone located between 1.0950 and 1.1020 (Fibonacci Levels 50% and 61.8% of the most recent bearish swing).
As we mentioned before, bearish rejection should be anticipated after such a long bullish rally that originated off 1.0650 and 1.0710.
Previously, around the price level of 1.0950, a Shooting-Star daily candlestick was expressed. This was repeated yesterday. Thus, enhancing the short-term bearish direction.
A valid SELL position was suggested at retesting which took place this week. Initial bearish target is located around 1.0825.
Conservative traders should wait for higher entry levels to be retested especially around 1.0930. Daily closure below price zone of 1.0870-1.0850 confirms a long-term double-top pattern with its projection target located at 1.0770.
On the other hand, persistence of daily fixation above 1.0950 (50% Fibonacci level) enables the bulls to shoot towards 1.1020 and 1.1050 initially (very low probability in the meanwhile ).
The material has been provided by InstaForex Company - www.instaforex.com
