False breakout on the USD/CAD

The USD/CAD has completed a false breakout below the 1.2300 level as shown on the daily chart and makes a daily low around the 1.2244 level. On the chart we can see clearly the long lower shadow that the pair left below the 1.2300 level, being this an indication that the bulls took control of the market towards the end of the session. If the next candle is confirmed as bullish, then the pair may try to visit the 55 day EMA round the 1.2531 level. Above the 55 day EMA, the 200 day EMA at the 1.2706 level may also act as resistance. Even though the price has left a false breakout below the 1.2300 level, the bearish trend is still in place on the USD/CAD and if it breaks below the 1.2244 level, then the bearish momentum may accelerate to make the price drop to the 1.2060 level, which could act as support as it did in the past.