Overview:
The USD/CAD pair established a temporary consolidation zone between the price levels of 1.1560 and 1.1670. This price zone roughly corresponds to 61.8% prominent WEEKLY Fibonacci level. Bullish breakout above it allowed bulls to reach new highs around 1.2490.
The market looks quite overbought since bulls have pushed further above the upper limit of the depicted bullish channels. Hence, high probability of bearish reversal exists.
The daily chart indicates a high probability of bearish reversal especially after a hanging man daily candlestick followed by the yesterday's bearish engulfing daily candlestick.
The nearest SUPPORT zone to meet the USD/CAD pair is located around 1.2015 - 1.1950 where a recent consolidation zone was established as well as the broken upper limit of the depicted channel that waits for retesting.
On the other hand, if bulls keep defending the recent INTRADAY SUPPORT around 1.2300, a new bullish swing may be established without further retesting of 1.1950.
Trading recommendations:
LONG positions are suggested at retesting of the new SUPPORT zone around 1.2015-1.1950. SL should be located below 1.1900. TP to be placed at 1.2100 and 1.2220.
The material has been provided by InstaForex Company - www.instaforex.com
