The depicted chart shows that the USD/CAD bulls failed to show enough momentum above 1.1200 during the last visit on March 20. The bears took an advantage and pushed the pair towards the price zone of 1.0910-1.0850 (50-61.8% Fibonacci levels on the daily chart).
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.
Temporary daily closure below 1.0920 took place. However, it didn't take long time to get a bullish engulfing daily candlestick as a bullish reaction on the next day pushed the pair again towards 1.1000.
On the other hand, on the 4H chart, the price zone of 1.0995-1.1045 (38.2% Fibonacci of the most recent bearish swing) was expected to provide a valid sell entry and it did.
The recent bearish spike that broke down 38.2% Fibonacci level to the upside, invalidated the bullish pressure which was being applied on 1.1000 for quite a long time.
The previously suggested bearish position is now running in profits. Stop loss should be lowered to 1.1020. The next TP level should be located at 1.0920 then 1.0880.
Price level 1.1020 remains the nearest resistance level for the pair. Any breakout above 1.1045 will invalidate the bearish tendency for the pair temporarily.
The material has been provided by InstaForex Company - www.instaforex.com
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