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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.
A few weeks ago, a bearish breakout below the support level of 1.3075 was needed to enable a further bearish decline to take place 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) enhanced the bullish side of the market on December 7.
A bullish visit towards the resistance level of 1.4150 (Fibonacci Expansion 100%) was expected as a result of a bullish breakout above 1.3400.
Bullish persistence above 1.4150 enhanced the bullish side of the market towards 1.4600-1.4650 (141.4% Fibonacci expansion) where bearish rejection should be expected.
On the other hand, the price zone of 1.3370-1.3400 remains the significant support zone to be watched for valid buy entries if bearish correction occurs.
Trading recommendations:
As we expected, a valid sell entry was offered around 1.4650 (141.4% Fibonacci expansion). It is already running in profits now. S/L should be located above 1.4700.
Next T/P levels should be located at 1.4280 and 1.4150.
On the other hand, conservative traders should wait for a bearish engulfing candlestick closure below the level of 1.4100 (Fibonacci Expansion 100%) to sell the USD/CAD pair. S/L should be located above 1.4150.
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