In the previous articles we suggested that the potential downside movement remained valid as long as the pair was trading below 1.0040 and below 1.0000 area, the psychological resistance.
The Daily chart showed a narrow consolidation range 0.9905-0.9955 located few pips above 0.9890 (50% Fibonacci Level), which was broken down. It opened the way towards 0.9825 without further bearish pressure, which indicated bullish retracement to take place which allowed the pair to come back again within the congestion zone 0.9905-0.9955.
On Wednesday, the USD/CAD pair expressed quite strong bullish reaction breaking through the upper limit of the depicted bearish channel on the 4H chart with a newly established ascending bottom at 0.9830. The pair gave daily closure above both 50% & 61.8% Fibonacci levels.
Also there's a possible double-top pattern to be confirmed with breakdown below the neckline at 0.9909 to be targetting at 0.9870.
Price Level 0.9955 (the upper limit of the previous consolidation range) provided strong resistance for the pair pushing the pair down to 0.9905 (the lower limit of the range).
Price Zone 0.9855 is rendered a confluence of support for the USD/CAD pair. Hence, a valid BUY entry can be taken there with SL just located below 0.9810, but we need to see 0.9905 broken down first.
Resistance: 0.9955, 1.0040, and 1.0080.
Support: 0.9870, 0.9830, 0.9805, and 0.9760.
