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. That is why, the price 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 and 1.1940 (projection target of the recent range breakout and the depicted weekly uptrend).
That is why, significant bullish support was offered around these price levels. Since then, a bullish pullback has been taking place.
The price zone of 1.2350-1.2400 remains significant Intraday resistance to be watched. Early signs of bearish reversal are now manifested on the chart (inverted hammer daily candlestick).
This price zone will probably offer a low-risk sell entry provided that the weekly candlestick closure comes below the price level of 1.2430.
Risky traders have taken a suggested BUY entry near the level of 1.1950. All T/P levels have already been reached. S/L should be advanced to 1.2240 to offset any associated risk.
Conservative traders can take a valid SELL entry anywhere around 1.2400 (the current price levels are less risky). S/L should be set as WEEKLY candlestick closure above 1.2450.
T/P levels should be placed at 1.2220, 1.2100 and 1.1950.
The material has been provided by InstaForex Company – www.instaforex.com