Overview:
A bullish breakout above the previous consolidation zone between 1.2400 and 1.2800 was executed on July 15 (shown on the weekly chart). The long-term bullish target was projected towards the level of 1.3270.
Significant bearish rejection has been 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 allow the 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.
Daily fixation above 1.3400 enhances the bullish side of the market.
A bullish visit towards the next resistance level of 1.4100 (Fibonacci Expansion 100%) should be expected.
On the other hand, the price zone around 1.3370-1.3400 remains the significant support zone to be watched for valid buy entries if a bullish pullback occurs soon.
Trading recommendations:
Conservative traders should wait for the USD/CAD pair to retrace towards the zone of 1.3380-1.3400 to have 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 long-term bullish target is projected towards 1.4100.
The material has been provided by InstaForex Company - www.instaforex.com