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 significant bearish rejection was observed around 1.3450. Hence another consolidation range was established from 1.3450 down to 1.2800.
On December 7, a bullish breakout above 1.3450 (upper limit of the recent consolidation range) enhanced the bullish side of the market.
Hence a bullish visit to the resistance at 1.4120 (Fibonacci Expansion 100%) occurred.
Bullish persistence above 1.4150 enhanced the bullish side of the market towards 1.4650 (141.4% Fibonacci expansion) where an evident bearish rejection was expected (bearish engulfing weekly candlestick).
The 1.4120 level (Fibonacci Expansion 100%) stood as a significant resistance level where a significant bearish rejection was applied.
Although the area of 1.3050-1.3250 was expected to offer bullish support for the USD/CAD pair, the same price zone was broken below as depicted on the daily chart.
Shortly after, the 1.3300 level stood as a significant resistance as it corresponds to the 50% Fibonacci level and the backside of the broken weekly uptrend where a valid sell entry was suggested on March 24.
Since then, the USD/CAD pair has been trapped within the consolidation range between 1.3300 and 1.2970 until a bearish breakout took place on April 11.
Shortly after the quick bearish decline took place below 1.2970, signs of bullish recovery were expressed around 1.2460.
Conservative traders were advised to consider the recent pullback towards 1.2970 (61.8% Fibonacci level) as a valid signal to sell the USD/CAD pair.
This position is already running in profits. Target levels should be located at 1.2700 and 1.2550 while S/L should be placed above 1.3050.
The material has been provided by InstaForex Company - www.instaforex.com