Since the USD/CAD bulls failed to show enough momentum above 1.1200 during the last visit on March 20, the pair has been downtrending within the depicted bearish channel, which managed to push towards the price zone of 1.0910-1.0850 (50-61.8% Fibonacci levels on the daily chart) where the pair has established a prominent congestion zone.
The USD/CAD pair found solid resistance around 1.0910-1.0950 that were able to resume the ongoing bearish momentum.
The pair was trapped within the depicted congestion zone between two very important Fibonacci Levels until bearish breakout turned to the bearish side.
Bearish projection targets got visited at 1.0725 and 1.0685 respectively (the lower limit of the ongoing bearish channel).
Bullish price action originated quite obviously when retesting of 1.0655-1.0630 which is the origin of the previous bullish impulse initiated in December 2013.
Please, also note the steep bearish channel depicted on the 4H chart. The price keeps respecting its limits at retesting. The pair is currently retesting the backside of the broken upper limit.
That's why, price action should be watched for a possible BUY entry. SL should be set as daily closure below 1.0600.
Note the state of indecision taking place around the current prices. This should render the bulls conservative with the mentioned Stop Loss and their potential targets around 1.0790-1.0800.
The material has been provided by InstaForex Company - www.instaforex.com
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