Since June 4, the USD/CAD pair movement is maintained within the midterm slightly bearish depicted channel with its upper limit located around 1.0245.
Fibonacci level 50% is located at the price level of 1.0120 and 61.8% is located at 1.0045 which were considered to be strong support levels. However, 1.0120 (50% Fibonacci) has been broken down last week after finding bearish rejection off the upper limit of the consolidation zone around 1.0230.
For two consecutive times, USD/CAD has been trapped within a narrow ranged price zone between 1.0170 -1.0230, the upper limit of which prevented further upside movement of the pair showing bearish price action which pushed the pair to the downside breaking down the lower limit of the consolidation range, the same price action took place on Wednesday towards 1.0230 pushing the USD/CAD pair towards 1.0170 which was broken down opening the way towards 1.0085 then 1.0045 as expected.
Price zone between 1.0045 -1.0015 corresponding to the lower limit of the midterm bearish channel should be carefully watched while being tested today for bullish price action which was expressed yesterday manifested in the bullish hummer candlestick of yesterday.
4H closure back again above 1.0045 brings bullish strength into the market allowing bullish retracement to take place towards 1.0070, 1.0120 then 1.0150.
Bearish breakdown of 0.9950 invalidates the bullish scenario in short term.
