On a 4-hour chart USD/CAD formed “Bearish Engulfing” after a strong upmove, giving a bearish signal. This candlestick was developed after the pair had reached the high of 1.0858 where the bulls were not able to fixate and the bears took over. If the decline continues, we should expect the movement to 1.0550 area where the level of Fibonacci correction 31.8 is placed together with the support level. If the currency pair breaks the level, it will target to Fibo correction level of 61.8.
Though, if USD/CAD gets through the support level of 1.0858 short positions should be closed as this break will cause buying the UD dollar versus the currency of Canada.
