Overview:
The USD/CAD pair established previous consolidation zone between the price levels of 1.1560 and 1.1670. This price zone roughly corresponds to 61.8% prominent WEEKLY Fibonacci level. Bullish breakout above it allowed bulls to reach new highs around 1.2560.
The market looks quite overbought since bulls have pushed further above the upper limit of both depicted bullish channels. Hence, a coming bearish correction should be anticipated.
Wednesday's bullish engulfing daily candlestick invalidated the preceding Hanging-Man candlestick.
Moreover, the USD/CAD bulls defended the recent INTRADAY SUPPORT around 1.2300. Hence, a new bullish swing is being established without further retesting of 1.1950.
The nearest resistance levels to meet the USD/CAD pair are located around 1.2820, then 1.2930 where previous WEEKLY highs were established back in 2009.
Trading recommendations:
It's recommended to stay out of the market until the next destination of the USD/CAD pair becomes obvious, but, anyway, try to look for signs of bearish reversal around such historically high prices (1.2850-1.2900).
The material has been provided by InstaForex Company - www.instaforex.com
