On August 18, signs of bullish recovery were manifested around the price level of 1.2830 which led to the current bullish breakout above 1.3000.
The USD/CAD pair was trapped between the price levels of 1.3000 (61.8% Fibonacci level) and 1.3360 (50% Fibonacci level) until a bullish breakout took place one month ago.
Note that the USD/CAD pair challenged the upper limit of the depicted channel around 1.3360-1.3400 which succeeded to apply enough bearish pressure on the pair.
Shortly after, a bearish engulfing weekly candlestick was expressed by the end of the week indicating strong resistance around 1.3550.
Bearish persistence below the price level of 1.3300 (50% Fibonacci Level) was achieved.
This allowed a further decline toward 1.3200 and 1.3080 (the lower limit of the depicted channel) where bullish rejection was expressed as anticipated.
A bullish breakout above 1.3360 (50% Fibonacci level) was expected to allow a further advance toward 1.3700-1.3750 (the upper limit of the depicted channel). However, significant bearish rejection was expressed around 1.3580 (recent established top).
The price level of 1.3300 (50% Fibonacci Level) failed to provide enough support for the recent bearish pullback.
That’s why, a further decline toward 1.3000 (61.8% Fibonacci level) should be watched for a possible BUY entry if enough bearish pressure is applied below 1.3150 (the lower limit of the depicted channel).
The material has been provided by InstaForex Company – www.instaforex.com
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