The depicted chart shows that the USD/CAD bulls failed to show enough bullish momentum above 1.1200. The bears took advantage of pushing the pair towards price zone of 1.0910-1.0850 (50-61.8% Fibonacci levels).
The USD/CAD pair returned to test the previous support zone around 1.0900 (50% Fibonacci level) which previously provided a considerable support at retesting on February 19.
Daily closure below 1.0920 took place briefly. However, it didn't take long time to get a bullish engulfing daily candlestick as a bullish reaction on the next day.
On the other hand, on the 4H chart, the price zone of 1.0990-1.1045 ( 38.2% Fibonacci of the most recent bearish swing ) is expected to provide a considerable resistance as well. This price zone corresponds to a recently established resistance zone too.
Any further visiting will probably offer a valid sell entry with stop loss located just above 1.1080.
It's important to note that the 4H chart reveals bullish pressure being applied over this resistance zone around 1.1000-1.1030 and there's little probability of bullish breakout.
The bullish Head and Shoulders pattern is being expressed with successive ascending bottoms being established. However, lack of bullish follow-up is manifested above 1.1000.
This may threatens our SELL entry level, so bears should watch price action carefully and stick to the stop loss level mentioned above .
The material has been provided by InstaForex Company - www.instaforex.com
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