Having passed through the Weekly Low 0.9924, the USD/CAD pair resumed the trading higher than this point. This fact can be considered as negative for sellers until the direction will change.
Also it is necessary to mention that the position of the USD/CAD pair on the 4H chart is controversial as it has been consolidating within the same range 0.9920 - 1.0050 since January 25. The range remained over 130 pips during the month without a real breakdown. However, a possible bullish Head & Shoulders pattern is likely to be formed on the 4H chart with the neckline at 1.0018.
Having failed to break through the support level 0.9960-0.9940, the pair has passed through the 0.9985 level. This will open the way to the 1.0040-1.0060 level.
After the Friday’s breakdown of the level 0.9985, the pair is approaching the upper limit of the transverse Yellow channel and the upper limit of the narrow violet bullish channel.
In case this resistance level is broken down, the pair will reach the 1.0040-1.0060 level and further the H&S pattern target near 1.0127.
The nearest support levels of the pair correspond to the intermediate line of the Yellow channel at 0.9960-0.9940 levels which are expected to be defended by bulls.
The breakdown of this support level will open the way to the mentioned weekly low 0.9924, resuming the sideway consolidation.
Based on the previous analysis
It is recommended to open the LONG positions above the 0.9985 level, which is presently considered as profitable.
Profits should be taken at levels 1.0025, 1.0050 with price action near 1.0050 considering the possible reversal or breakdown in order to extend our targets.
The breakdown of the 0.9960-0.9940 is to be considered the level for SL for the Long position.
