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As for the USD/CAD pair, it is growing for the second day in a row after a 3-day decline the day before. The fall of USD/CAD stopped last Friday in the area of support levels 1.2732 (EMA200 on the 4-hour chart), 1.2740 (Fibonacci 38.2% of the downward correction in the wave of USD/CAD growth from 0.9700 to 1.4600).
If we consider the current growth of USD/CAD as corrective, then the pair has reached a maximum of corrective growth, hitting a strong resistance near the key level 1.2855 (EMA200 on the weekly chart and EMA50 on the monthly chart). Therefore, in the area of this resistance level, a reversal and resumption of decline is possible.
If you look at the daily and weekly USD/CAD charts, you can see that the pair is developing an upward trend, moving within the ascending channels. The upper border of the channel on the weekly USD/CAD chart is close to 1.3100, which will become the nearest target for USD/CAD growth after the breakout of the zone of strong resistance levels 1.2855, 1.2900, 1.2960.
We adhere to the USD/CAD growth scenario towards a more distant target and the resistance level 1.3450 (23.6% Fibonacci level).
In an alternative scenario, the first signal for the resumption of short positions will be a breakdown of the local support level 1.2810, and the confirming one will be a breakdown of support levels 1.2785 (local support level), 1.2776 (EMA200 on the 1-hour chart).
Breakdown of the long-term support level 1.2655 significantly increases the risks of USD/CAD returning into the long-term bearish trend.
Support levels: 1.2785, 1.2776, 1.2740, 1.2732, 1.2655, 1.2625, 1.2540, 1.2455, 1.2290, 1.2165
Resistance levels: 1.2855, 1.2900, 1.2960, 1.3100, 1.3450
Trading scenarios
USD/CAD: Sell Stop 1.2805. Stop Loss 1.2865. Take-Profit 1.2785, 1.2776, 1.2740, 1.2732, 1.2655, 1.2625, 1.2540, 1.2455, 1.2290, 1.2165
Buy Stop 1.2865. Stop Loss 1.2805. Take-Profit 1.2900, 1.2960, 1.3100, 1.3450
