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 1.2800 and 1.3380.
Last week, a bearish breakout below the support level of 1.3075 was mandatory to allow the further bearish decline towards 1.2900. However, an evident bullish rejection was expressed around this level.
A bullish breakout above 1.3380 was made on Monday earlier this week.
Daily fixation above 1.3380 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 around 1.3380 is still a significant support zone to be watched for valid buy entries.
Trading recommendations:
Conservative traders should wait for a bearish pullback towards 1.3380-1.3400 to buy the USD/CAD pair.
S/L should be placed below 1.3300.
Initial T/P levels should be placed at 1.3500 and 1.3600. A bullish target is projected towards 1.4100.
