Overview:
Since bulls pushed the price further above the upper limit of both depicted bullish channels and the 79.6% Fibonacci level, the market looked quite overbought.
The market failed to hold above 1.2650 - 1.2680 (previous highs) resulting in the formation of a Triple-top pattern.
Successive lower highs were established within the depicted consolidation zone, enhancing the bearish side of the market.
Moreover, support levels around 1.2350 and 1.2300 (79.6% Fibonacci level) were broken after providing significant support for several weeks on the daily and weekly charts.
A daily fixation below 1.2300 clears the way for the USD/CAD pair towards the zone between 1.2000-1.1950 (where the projection target of the recent range breakout is located) and 1.1800 where the depicted weekly uptrend is roughly located.
On the other hand, the price zone of 1.2320-1.2350 remains a significant intraday resistance zone at further retesting. This is where the price action should be watched for a low-risk sell entry.
Trading recommendations:
For those who missed the initial breakout below 1.2100, conservative traders should wait for bullish pullback towards 1.2100-1.2130 for a low-risk sell entry.
T/P levels should be placed at 1.1950, 1.1860 and 1.1810 while S/L should be placed above 1.2170.
