A bullish breakout above the previous consolidation zone between 1.2400 and 1.2800 was performed on July 15 (shown on the weekly chart). A long-term bullish target was projected towards the level of 1.3270.
A significant bearish rejection was observed around 1.3450. Since then, another consolidation range was established between 1.2800 and 1.3400.
Few weeks ago, a bearish breakout below the support level of 1.3075 was needed to enable a further bearish decline towards 1.2900. However, an evident bullish rejection was expressed around this level.
A bullish breakout above 1.3400 (the upper limit of the recent consolidation range) was performed on December 7.
A daily fixation above 1.3400 enhanced the bullish side of the market.
A bullish visit to the next resistance level of 1.4150 (Fibonacci Expansion 100%) was expected to take place. A temporary bullish fixation above 1.4150 is being manifested on the daily chart.
Note that bullish persistence above 1.4150 enhances the bullish side of the market towards 1.4600-1.4650 where 141.4% Fibonacci expansion is located.
On the other hand, the price zone of 1.3370-1.3400 remains a significant support zone to be watched for a valid buy entries if a bearish correction occurs.
Risky traders can wait for a bearish engulfing candlestick closure below the level of 1.4100 (Fibonacci Expansion 100%) to sell the USD/CAD pair.
On the other hand, conservative traders should wait for the USD/CAD pair to retrace towards the zone around 1.3400 looking for a low-risk buy entry. S/L should be placed below 1.3300. Initial T/P levels should be placed at 1.3500 and 1.3600.
The material has been provided by InstaForex Company – www.instaforex.com