Last week in the previous articles we suggested that the potential downside movement remains valid as long as the pair is trading below 1.0040 and below 1.0000 area, the psychological resistance.
On Friday, the USD/CAD pair expressed strong bearish reaction towards 1.0020-1.0050, failing to consolidate above 1.0040 (the high of Thursday's DAILY candlestick).
Price zone 0.9880 - 09845 (Important Fibonacci Levels) provided strong support expressing strong bullish price action which is manifest in the giant bullish engulfing daily candlestick.
Probably it indicates a strong bearish move towards 0.9995; then 0.9945 is to take place soon. However, Intraday Support around 0.9980 needs to be broken down as early as possible.
4H chart shows a possible bearish Head and Shoulders reversal pattern to be targeting at 0.9955 initially.
Support: 0.9980, 0.9925, and 0.9875.
Resistance: 1.0010, 1.0040,1.0080, and 1.0100.
Price zone 1.0025 - 1.0040 should be watched carefully for a possible valid SELL entry with SL located above 1.0060.
Obvious breakdown below 0.9980 supports the bearish scenario in the short-term targeting 0.9900 initially.