The USD/CAD pair has failed to show enough bullish momentum above 1.1200 during the last visit on March 20.Since then, the pair has been downtrending within the depicted bearish channel.
Bullish rejection was expressed at retesting the lower limit of the bearish channel around 1.0630 on July 3 (the origin of the previous bullish impulse initiated in December 2013).
This enabled bulls to achieve a bullish breakout off the depicted channel allowing bulls to retest the price zone between 1.0910-1.0850 (50-61.8% Fibonacci levels on the daily chart) where a prominent congestion zone was formed previously.
The USD/CAD pair had a strong resistance zone located between 1.0950 and 1.1020 (Fibonacci Levels 50% and 61.8% of the most recent bearish swing).
As we mentioned before, bearish rejection should be anticipated after such a long bullish rally that originated off 1.0650 and 1.0710.
Previously, around the price level of 1.0950, agressive bearish rejection was expressed. This was manifested in many Shooting-Star daily candlesticks. Thus, the short-term bearish direction is enhancing .
A valid SELL position was suggested at retesting which took place this week. Initial bearish target is located around 1.0825.
Conservative traders should wait for higher entry levels to be retested especially around 1.0880-1.0900.
Daily closure below price zone of 1.0870-1.0850 confirms a long-term double-top pattern with its projection target located at 1.0770.
On the other hand, daily fixation above 1.0950 (50% Fibonacci level) enables the bulls to shoot towards 1.1020 and 1.1050 initially (very low probability in the meanwhile ).