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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 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 (the upper limit of the recent consolidation range) enhanced the bullish side of the market. Hence, a bullish visit towards the resistance level of 1.4120 (Fibonacci Expansion 100%) was executed.
Bullish persistence above 1.4150 enhanced the bullish side of the market towards 1.4650 (141.4% Fibonacci expansion) where evident bearish rejection was expected (a bearish engulfing weekly candlestick).
The level of 1.4120 (Fibonacci Expansion 100%) remains a significant key level to be watched for price reaction during the current week's consolidations. It may offer a valid sell entry if any bullish pullback occurs soon.
On the other hand, the price zone of 1.3370-1.3400 remains a significant support zone to be watched for valid buy entries if the current bearish momentum persists below the mentioned key level (1.4100) and 1.4000 (a prominent Weekly Support).
Trading recommendations:
As we expected, a valid sell entry was offered around 1.4650 (141.4% Fibonacci expansion). It is already running in profits.
S/L should now be lowered to 1.4150 to secure our profits, while the next T/P level remains projected at 1.3800 if USD/CAD bears develop enough bearish momentum below 1.4100 and 1.4000.
On the other hand, conservative traders should wait for a bearish pullback towards the zone of 1.3370-1.3400 where a valid buy entry can be offered.
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