FX.co ★ USD/CAD intraday technical levels and trading recommendations for October 15, 2014

Overview:

Two months ago, the ongoing bearish swing (initiated in March 2014) was hindered at the price level of 1.0620. This price level corresponded to the lower limit of the channel as well as the backside of a steeper bearish one.

In August, bullish breakout off the movement channel took place. This enabled a bullish Flag pattern to be established. Bullish targets were successfully hit, including price level of 1.1230 and recently 1.1289.

Strong bullish momentum has been expressed for a couple of weeks. As mentioned before, breaching the price zone of 1.1230-1.1260 and fixation above it triggered new bullish swing.

The USD/CAD pair is currently testing the upper limit of a steeper bullish channel depicted on the chart. 

This corresponds to price level of 1.1370. Bearish rejection should be anticipated after such a long bullish swing. Bearish correction is anticipated at least towards 1.1260.

Recommendations:

The USD/CAD pair looks overbought on the daily. The bulls are pushing beyond the upper limit of the movement channel.

Conservative traders should look for short positions at such high prices.

That's why, the price zone of 1.1370-1.1390 should be watched for a SELL entry with SL located just above 1.1400.