The USD/CAD at the edge of a cliff

After the head and shoulders pattern was completed on the USD/CAD daily chart, the price of the pair has continued falling, below the 1.2600 level. During the last four trading sessions, the USD/CAD has consolidated just below the 1.2600 level with a good resistance at that zone, but today the price is trying to break below the 1.2545 level. In case of a breakdown below the 1.2545 level, the USD/CAD may fall to the 1.2448 level where the pair already bounced to the upside during the pullback registered in mid-February. However, a better and most important support zone is at the low around the 1.2244 level. On the other hand, if the USD/CAD manages to break above the 1.2600 level, it could try to go and visit the 200 day EMA around the 1.2735 level, where we can also find the 55 day EMA (purple line). If the 55 day EMA crosses below the 200 day EMA, then we could have a “death cross” pattern, which has bearish implications in the mid-term. Therefore, any pullback or bullish correction may be short-lived.