After the USD/CAD pair broke below 0.9845, the market went to the downside reaching the price level of 0.9635 testing the lower limit of the depicted bearish long-term channel which expressed a considerable bullish strength.
The USD/CAD pair reacted strongly towards the upper limit of the depicted channel pushing the pair to the downside testing the intraday Support zone 0.9720-0.9700 (neckline of a bullish H&S reversal pattern).
It's important to notice that the USD/CAD pair is probably establishing an ascending bottom around 0.9777 which held price above at the last retesting on Friday last week.
Price level of 0.9850 expressed bearish price action last week. That's why break above price level 0.9850 is essential for USD/CAD to remain bullish in the short term.
Fixation above 0.9850 threatens again the bearish view confirming the possible bullish Head & Shoulders pattern depicted on the chart which will be targetting around 0.9920.
The material has been provided by Instaforex Company - instaforex.com
