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 allow 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.
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.
Significant bearish rejection and valid sell entry should be expected around this level.
On the other hand, the price zone around 1.3370-1.3400 remains a significant support zone to be watched for a valid buy entries if a bullish pullback occurs soon.
A counter-trend sell position can be offered around 1.4100 (Fibonacci Expansion 100%) for risky traders if enough bearish rejection is expressed when retesting takes place.
On the other hand, conservative traders should wait for the USD/CAD pair to retrace towards the zone of 1.3380-1.3400 looking for a low-risk buy entry. S/L should be placed below 1.3300.
The 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