Since bulls pushed the price further above the upper limit of both depicted bullish channels and the 79.6% Fibonacci level, the market looked quite overbought.
The market failed to hold above 1.2650 – 1.2680 (previous highs) resulting in the formation of a Triple-top pattern.
Successive lower highs were established within the depicted consolidation zone, enhancing the bearish side of the market.
Support levels around 1.2350 and 1.2300 (79.6% Fibonacci level) were broken after providing significant support for several weeks on the daily and weekly charts.
A daily fixation below 1.2300 cleared the way for the USD/CAD pair towards the levels of 1.2000, 1.1940 (projection target of the recent range breakout), and 1.1870 (the depicted weekly uptrend) if enough bearish momentum is maintained. That is why these levels should be watched carefully for early signs of the bullish price action.
On the other hand, the price zone of 1.2320-1.2350 remains the significant intraday resistance zone for further retesting. This zone is likely to offer a low-risk sell entry for retesting.
For those who missed the initial breakout below 1.2100, conservative traders should wait for a bullish pullback towards 1.2170-1.2200 for a low-risk sell entry.
T/P levels should be placed at 1.1950, 1.1860, and 1.1810 while S/L should be placed above 1.2170.
Risky traders can take a high-risk BUY entry around the price level of 1.2000. T/P is projected at 1.2100 and 1.2270 as long as USD/CAD bulls keep defending the recent low (1.1940).
The material has been provided by InstaForex Company – www.instaforex.com