This week, the bulls managed to reach new price levels (around 1.1000) that haven't been reached since September 2009. This bullish momentum is purely fundamental-induced due to the positive data from the United States.
Yesterday, Fed watcher Jon Hilsenrath comments about the probability to reduce further monetary easing in the next week applied further bullish pressure on the pair. However, the USD failed to keep its gains against the CAD as the USD/CAD pair was pushed again below 1.0975 by the end of the day.
The next prominent resistance level is located around 1.1230 corresponding to 50% Fibonacci Level of the bearish movement extending between March 2009 and July 2011.
Temporary resistance is located at the price level of 1.1000 as it corresponds to the upper limit of the depicted bullish channel.
The USD/CAD pair has a prominent support zone at 1.0700-1.0750 which represents the upper limit of consolidation range that got broken this month.
Any further testing of this zone will provide a valid BUY entry for the mid-term.
The 4H chart reveals the obvious bearish rejection (bearish engulfing candlestick) which was expressed Yesterday in reaction to price level of 1.1000.
The short-term view seems to be negative as long as the pair is consolidating below 1.0975. Today, the bears need to breakdown the next uptrend line that comes to meet the pair around 1.0950.
Breakdown of this uptrend line will probably open the way for a corrective movement towards 1.0900 then 1.0860. Otherwise, the long-term bullish scenario mentioned above would be intact.
The material has been provided by InstaForex Company - www.instaforex.com
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