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 a bullish retracement had taken place which allowed the pair to come back again within the congestion zone 0.9905 - 0.9955.
Last week, the USD/CAD pair expressed quite strong bullish reaction breaking through the upper limit of the depicted bearish channel on the 4H chart with newly established ascending bottoms at 0.9870 and 0.9910.
This week, price level 0.9905 (lower limit of previous congestion zone) was broken down with quite strong bearish strength manifested in the long red 4H candlestick which led the USD/CAD pair towards 61.8% Fibonacci around 0.9850.
Price Zone 0.9850 is rendered as a confluence of support for the USD/CAD pair. Hence, a valid BUY entry can be taken with SL located just below 0.9810. We need to see quick consolidation above 0.9870.
Resistance: 0.9870, 0.9955, 1.0040, and 1.0080.
Support: 0.9850, 0.9805, and 0.9760.
