FX.co ★ USD/CAD Intraday Technical Analysis and Trading Recommendations for April 6, 2012

- 4H CHART -

This week the USD/CAD pair has successfully broken the lower limit of both Violet and Blue channels with a long bearish 4H candlestick.
This bearish breakdown took place after the successful "Head & Shoulders" reversal pattern with neckline at 0.9950 rendering price levels 0.9950-0.9970 (which corresponds to the lower limit of the broken channels and the neckline for the reversal pattern) a valid SELL entry.
Yesterday we observed a massive bearish reaction towards this level without stepping above 1.000 pushing the USD/CAD pair towards 0.9906 which is the low of the daily candlestick.

-1H Chart -

The USD/CAD is about to turn its short-term trend into bearish one which is obvious in the direction of the Violet channel.
The support level 0.9945 was broken easily yesterday leading the USD/CAD pair to decline towards the 1st target at 0.9925 where some profits should have been taken.
After a breakdown of the lower limit of the Yellow channel at 0.9940, the pair is expected to retest this broken level providing a valid SELL entry for those who missed the SELL-deal Yesterday.
The expected bearish movement will probably have targets at 0.9903 and 0.9850 levels. However, trading above 1.0000 invalidates the current bearish scenario.