On Friday the USD/CAD pair expressed massive bearish reaction towards the upper limit of the Yellow channel around 1.0355 making a quick bearish movement of about 200 pips then reaching the lower limit of the Blue channel around 1.0160 and exceeding the Average Daily Range by about 75 pips.
Despite strong bearish movement during this week, USD/CAD failed to make obvious weakness of the bearish domination which is manifest in the sideway Violet channel.
Bullish retracement is expected to begin at Intraday Support Level retesting located around 1.0140 which corresponds to the mid-line of the Yellow channel and targets the upper limit of the same channel around 1.0220.
Breakdown of Support Level 1.0200 invalidates the bullish scenario for retracement and opens the way directly towards 1.0090 and then 1.0040.
Price zone 1.0220-1.0235 is expected to act as a strong Intraday Resistance Zone for the USD/CAD pair as it corresponds to the upper limit of the Yellow channel & Average Daily Range for today where price action should be watched for a possible sell entry resuming the downtrend initiated last week.