Overview:

Two months ago, the bearish swing (initiated in March 2014) 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.

A bullish breakout off the movement channel took place in August. Since then, the pair has been trending-up within the depicted bullish channels.

As mentioned before, breaching the price zone of 1.1230-1.1260 and fixation above it triggered new bullish impulse. Strong bullish momentum has been expressed for a couple of weeks so far. This movement was maintained within a steeper bullish channel.

The bulls were pushing beyond the upper limit of the movement channel. The USD/CAD pair looked overbought on the daily chart. 

Few days ago, the USD/CAD pair tested the upper limit of the steeper channel. This corresponded to the price level of 1.1370. Immediate bearish rejection was expressed as anticipated after such a long bullish swing resulting in a bearish correction towards 1.1200.

Recommendations:

Conservative traders should be looking for short positions around the price zone of 1.1270-1.1290 with SL located just above 1.1320.

On the other hand, for traders who missed the initial entry, 4H fixation below 1.1230 - 1.1210 ( 50% Fibonacci level ) is another valid signal with a higher risk/reward ratio. Initial targets are located at 1.1180-1.1160.