FX.co ★ USD/CAD Intraday Technical Analysis and Trading Recommendations for March 5, 2012

Last week the USD/CAD pair showed the massive bearish reaction towards the resistance area 1.0040-1.0060 manifested in the "Inverted Hammer" daily candlestick.

This resistance area which managed to keep the USD/CAD prices below for over a month despite the several attempts to break it, also corresponds to the downtrend line and to the upper limit of the transverse channel depicted on the chart.

Last week the USD/CAD pair could successfully break its intraday support at 0.9940 making the quick decline of currency price towards 0.9850 possible and enabling the USD/CAD resume the upside movement.

Now the USD/CAD pair is testing the broken support 0.9940 which is expected to act as a resistance level giving another good low risk of SELL entry at the current price 0.9945 with SL 4H closure above 0.9990

It is necessary to consider 4H closure below 0.9920 then 0.9850 in order to resume the bearish movement.

TP for the short positions should be set at 0.9900, 0.9850, 0.9770 then 0.9660.