This week USD/CAD showed massive bearish reaction towards resistance area of 1.0040-1.0060 manifested in the "Inverted Hammer" daily candlestick.
This resistance area which was able to keep USD/CAD prices below it for almost one month despite the several attempts to break it, also corresponds to the downtrend line and the upper limit of the transverse channel depicted on the chart.
This week USD/CAD could successfully break its intraday support at 0.9940 which allowed the current decline of currency price to happen.
The USD/CAD pair has an intraday support at 0.9850 which was mentioned in the previous two days as a first bearish target after break of 0.9940.
We need to see 4H closure below 0.9850 in order to resume the bearish movement.
Yesterday we had another daily closure below 0.9920 which gives more confirmation of the direction towards 0.9770. However, 4H closure above 0.9990 gives warning for sellers to get out of the short positions.
Based on the previous analysis
For swing traders, we have an open short position with TP at 0.9770 then 0.9660.
For intraday traders, to minimize risk, selling the USD/CAD pair near 0.9940 will be appropriate with SL placed above 0.9990.
