The bullish breakout off the depicted channel allowed the bulls to retest the price zone between 1.0910-1.0850 (50-61.8% Fibonacci levels on the daily chart) where a prominent congestion zone was previously formed.
One month ago, the USD/CAD pair failed to maintain daily closure above price level of 1.0950, then a double-top reversal pattern was expressed at retesting last week.
As we mentioned before, bearish rejection was anticipated after such a long bullish rally that originated off 1.0650 and 1.0710.
A valid SELL position was suggested at retesting which took place last week. The initial bearish target was located around 1.0825, then 1.0770 (considerable Intraday support).
The price zone of 1.0880-1.0900 still offers a valid low-risk SELL entry as we mentioned last week.
As long as the recent top at 1.0990 remains unbroken, our sell position remains valid.
Daily closure below the price zone of 1.0870-1.0850 confirms a long-term double-top pattern (on the daily chart) with its projection target located at 1.0770.
Note that last week the USD/CAD fell slightly after the release of the PMI data (below expectations), a bearish spike dipped down to 1.0870 before bullish recovery was witnessed.
On the other hand, 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 meantime).
The material has been provided by InstaForex Company - www.instaforex.com
