The USD/CAD pair was trading in oversold position within a wide range bearish channel which is depicted on the chart in red when the pair broke through the upper limit of the short term bearish channel presented on the chart in Blue indicating a possible bullish retracement towards price level of 0.9970 with two successful retestings of the backside of the broken channel at 0.9888 then at 0.9845.
Breakout above the bearish Blue channel gave the opportunity for the USD/CAD pair to visit the upper limit of the longer term channel around the price level of 1.0025. However, the pair found resistance around price level of 0.9945. Since then the USD/CAD pair has been trapped within the consolidation range between 0.9845 - 0.9945.
The price level of 0.9845 which corresponds to the lower limit of the consolidation range is being tested today where bullish price action should be watched for a valid BUY entry with SL located below 0.9800 with taking into consideration that price level 0.9945 became a stronger resistance level now corresponding to the upper limit of the long-term bearish channel as well.
For the long term aspect, the price level of 1.0025 corresponds to Fibonacci levels of 50% and 78.6% of the most recent two bearish swings. That's why price action should be watched there for a valid long term SELL entry with SL located above 1.0080.
The material has been provided by Instaforex Company - instaforex.com
