On May 16, a bullish pullback towards 1.3000 (61.8% Fibonacci level) was expected to offer a valid signal to sell the USD/CAD pair. However, a lack of a significant bearish rejection was manifested during recent consolidations.
On May 18, temporary bullish fixation above 1.3000 (61.8% Fibonacci level) opened the way towards the 1.3180 level where significant bearish pressure was originated.
Bearish persistence below 1.3000-1.2970 (61.8% Fibonacci level) was needed to enhance bearish momentum in the market.
However, recent signs of bullish recovery were manifested around the price level of 1.2830 on August 18.
Conservative traders should consider the current bullish pullback towards 1.3000-1.3100 (61.8% Fibonacci level) as a valid SELL entry. S/L should be set as a daily candlestick closure above 1.3100.
Daily persistence below 1.2950 (61.8% Fibonacci level) should be defended in order to enhance the bearish side of the market. Initial bearish targets are located at 1.2670 and 1.2580.
On the other hand, note that daily fixation above 1.3000 (61.8% Fibonacci level) opens the way towards the price level of 1.3300 (50% Fibonacci level) where price action should be watched for a better SELL entry with a lower risk/reward ratio.
The material has been provided by InstaForex Company - www.instaforex.com