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 0.9910 - 0.9970 located few pips above 0.9890 (50% Fibonacci Level), which was broken through.
Last week price level 0.9915 (lower limit of previous congestion zone) was broken through 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 without further bearish pressure. However, bullish retracement that took place this week was capped around 0.9880.
Consolidation should be fixed below 0.9850 and then 0.9830 in order to resume the bearish movement towards lower levels. Moreover, there is a possible Head and Shoulder continuation pattern that will be targeting at 0.9785 which needs fixation below 0.9830 to be confirmed. However, failure to do it today indicates a bullish reversal for a retest of 0.9900 - 0.9920 again.
Resistance: 0.9880, 0.9955, 1.0040, and 1.0080.
Support: 0.9830, 0.9805, and 0.9780.
