USD/CAD shooting star on verge of breaking out channel support

FX:USDCAD   U.S. Dollar / Canadian Dollar
218 0 3
On daily chart , although the prices are trying bounce from last 3-4 days, now remained well below 7 & 21DMA.

Current prices are testing resistance at 7DMA.

While breaking channel support, a resembling bearish engulfing pattern followed by a bearish candle with big real body appeared, as a result bears continued with slumps.

On a longer term perspective, shooting star candle pattern occurred at 1.3968 levels, the pair has dipped from the highs of 1.4689 levels to the current 1.3079 within a span of almost 3 months.

Both leading oscillators signal extreme selling pressures, as RSI (14) evidences a bearish convergence with the dipping price spikes from overbought zone, currently trending downwards below 60.

While, Clear bearish crossover on stochastic from overbought zone signals selling momentum.

In addition to that, now an attempt of breaking channel support.

For long term investors should wait if it sustains the breach below on a closing basis or bounce back again.

Trade tips:

But for active speculators can think of option tunnel construction for downside targets of around 50-60 pips with ease.

On hourly chart. the prices pushing southwards as it approaches upper Bollinger band and 7DMA, so at current juncture smart way to approach this pair is to deploy the option tunnel using ITM             strikes.

It would be structured as a binary version of a conventional debit put spread, i.e. long delta ITM             puts with while writing the lower strikes.

Therefore an In-The-Money tunnel would be formed of an In-the-money -0.75 delta put below the current exchange rate less an Out-Of-The-Money put above the exchange rate. The delta of -0.65 on combined position with slightly negative theta is preferred on this execution.
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