The bulls managed to hit fresh highs (around 1.1220) that haven't been visited since 2009.
Recently, the USD is failing to keep its gains against CAD, and the USD/CAD pair was pushed to the downside indicating weakness of the ongoing bullish momentum.
This is manifested in the previous weekly candlestick that came as bearish engulfing one.
The nearest resistance zone is located around 1.1230-1.1250 corresponding to the 50% Fibonacci level of the bearish swing that extended between March 2009 and July 2011.
The daily chart reveals an atypical Head and Shoulders reversal pattern. If this pattern is confirmed, the USD/CAD pair will have a projection target located at 1.0880.
The pair has a significant support zone between 1.0700 and 1.0730 representing the upper limit of a previous consolidation range that got broken last month.
Minor support zone is located between 1.0950-1.0860 corresponding to the previous congestion zone established in mid-January.
Intraday bullish rejection may be expressed there as manifested on Friday's daily candlestick. However, the pair will probably retest this price zone again most likely within the current week.
The next destination for the USD/CAD pair will probably be the price zone of 1.0700-1.0730. Retesting of this zone would probably provide a valid BUY entry for the mid-term.
The material has been provided by InstaForex Company - www.instaforex.com
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