FX.co ★ USD/CAD intraday technical levels and trading recommendations for October 8, 2014

The USD/CAD pair has been down-trending within the depicted bearish channel. This bearish trend started with retesting 1.1260 when bears initiated this extensive bearish impulse.

Two months ago, the bearish swing mentioned above was hindered at the price level of 1.0620. This price level corresponded to the lower limit of the channel as well as the backside of a steeper  bearish one.

In August, bullish breakout off the movement channel took place. This enabled the current bullish Flag pattern to be established. 

Daily closure above 61.8%  Fibonacci level (1.1020) confirmed the Flag pattern rendering price level of 1.0985 as a valid BUY entry.

Projection target was roughly located at 1.1250. It has already been reached earlier last week.

Recommendations:

Price zone of 1.1250-1.1276 corresponds to previous significant tops on the daily chart. Extensive bearish rejection should be anticipated at retesting.

A SELL entry may be taken around 1.1250-1.1275. Bearish reversal on the daily chart is suggestive of upcoming bearish momentum especially after such a strong bullish rally. SL should be located above 1.1300.