FX.co ★ USD/CAD Intraday Technical Analysis and Trading Recommendations for November 16, 2012

The pair has been trending down when a bullish breakout above the bearish daily channel took place. However, the potential downside move 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, shortly after the USD/CAD pair reached down to 0.9880 which corresponds to 50% Fibonacci Level expressing quite strong bullish reaction too.
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.
This allowed the USD/CAD pair to initiate a bullish move towards 1.0025 corresponding to the upper limit of the bullish channel depicted on the charts. However, the bearish consolidation below 1.0000 - 1.0040 suggests a coming bearish movement, which needs 0.9980 to be broken down as early as possible.
Breakthrough of 1.0040 probably opens the way directly towards 1.0075.

Support: 0.9970, 0.9925, and 0.9875.
Resistance: 1.0010, 1.0040,1.0080, and 1.0100.

• Recommendation

Price Action towards the 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.