Overview:
A bullish breakout above the previous consolidation zone between 1.2400 and 1.2800 was performed 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 1.3400 down to 1.2800.
Last week, 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 was executed on Monday earlier this week.
Daily fixation above 1.3400 enhances the bullish side of the market towards the next resistance level at 1.4100 (Fibonacci Expansion 100%) where bearish rejection should be anticipated.
On the other hand, the price zone of 1.3370-1.3400 constitutes to be a significant support zone to be watched for valid buy entries.
Trading recommendations:
Conservative traders should wait for the USD/CAD pair to retrace towards the zone of 1.3380-1.3400 to have a valid 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