In order to confirm the expected Head & Shoulders reversal pattern, the USD/CAD pair needed to breakdown the neck-line around 1.0240 to open the way towards its bearish target at 1.0160. However, the pair failed to do so today. Instead, it showed significant bullish price action towards 1.0240 which pushed the pair towards the upper limit of the Yellow channel and the backside of the broken violet channel around 1.0275.
Price Level 1.0240 constitutes an important Intraday Support Level for USD/CAD corresponding to the neck-line of the H&S pattern and the mid-line of the Blue & Yellow bearish channels.
Price Level 1.0275 constitutes an important Resistance Level for the pair corresponding to the upper limit of the Yellow channel where price action of the pair should be watched for a possible low-risk SELL entry. However, breakthrough of 1.0275 probably leads to a quick bullish movement towards 1.0305 initially.
Breakdown of 1.0240 confirms the H&S pattern opening the way for the pair towards 1.0160. However, failure of the pair to do so invalidates the bearish scenario and the H&S pattern.
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