Last week, in the previous articles, we suggested that the potential downside movement remains valid as long as the pair is trading below 1.0040 and below 1.0000 area, the psychological resistance.
Price zone 0.9900 - 0.9860 (Important Fibonacci Levels) provided strong support expressing strong bullish price action, which is manifest in the giant bullish engulfing daily candlestick.
The USD/CAD pair expressed strong bearish reaction towards 1.0020-1.0050, failing to consolidate above 1.0040 (the high of Thursday's DAILY candlestick). This indicated a strong bearish move towards 0.9995; then 0.9945 took place, which actually occurred when Intraday Support around 0.9980 was broken down.
The Daily chart showed a narrow consolidation range 0.9950 -0.9980, in which the USD/CAD pair was trapped. Breakdown of 0.9950 opens the way directly towards 0.9900 - 0.9860 (50% Fibonacci Level) where price action should be watched for further decisions.
On Tuesday, the USD/CAD pair stepped just below the depicted lower limit of its bullish channel failing to consolidate below expressing a quite significant bullish price action. Also there is a possible bullish Head and Shoulders reversal pattern which gives a valid BUY entry around 0.9915 - 0.9900.
Support: 0.9915, 0.9875, and 0.9815.
Resistance: 0.9980, 1.0010, 1.0040, and 1.0080.
- Recommendation
Price zone 1.0025 - 1.0040 provided an excellent long-term SELL entry with SL located above 1.0060, profits should have been taken by now.
Price Zone 0.9915 - 0.9860 will probably provide a valid BUY entry with SL located just below 0.9840.
