Overview:
The USD/CAD pair has been trending upwards within the bullish channel depicted on the WEEKLY chart.
The market looked overbought since bulls have pushed further above the upper limit of both depicted bullish channels as well as the 79.6% Fibonacci level. That is why the current sideways movement was anticipated in the previous articles.
The nearest SUPPORT level to meet the USD/CAD pair is located around 1.2300 (79.6% Fibonacci level) that should be defended by bulls in order to maintain enough bullish momentum.
Note that successive lower highs are being established within the wedge-pattern depicted on the DAILY chart. It could be a reversal or continuation pattern as further price action indicates.
DAILY closure below the price level of 1.2300 exposes the next DAILY SUPPORT around 1.2000 where the backside of the upper limit of the breached channel is located.
On the other hand, bullish persistence above 1.2650 - 1.2680 (recent highs) enhances further bullish advancement towards 1.2780-1.2800 initially.
Trading recommendations:
At such high prices conservative traders should wait for a DAILY closure below 1.2300 for SHORTING the USD/CAD pair. TP levels should be set at 1.2250 and 1.2190.
Risky traders can benefit from the short-term bullish breakout above the wedge-pattern. BUY trigger is the DAILY closure above 1.2650. T/P levels should be set at 1.2800 and 1.2880.
The material has been provided by InstaForex Company - www.instaforex.com
