On August 18 signs of bullish recovery were manifested around the price level of 1.2830 which led to the current bullish breakout above 1.3000.
The USD/CAD pair was trapped between the price levels of 1.3000 (61.8% Fibonacci level) and 1.3360 (50% Fibonacci level) until a bullish breakout took place one month ago.
Note that the USD/CAD pair challenged the upper limit of the depicted channel around 1.3360-1.3400 which succeeded to apply enough bearish pressure on the pair.
Shortly after, bearish engulfing weekly candlestick was expressed by the end of the week indicating strong resistance around 1.3550.
Bearish persistence below the price level of 1.3300 (50% Fibonacci Level) was achieved.
This allowed a further decline toward 1.3200 and 1.3080 (the lower limit of the depicted channel) where bullish rejection was expressed as anticipated.
The current bullish breakout above 1.3360 (50% Fibonacci level) will probably liberate a quick bullish movement toward 1.3700-1.3750 (the upper limit of the depicted channel) where bearish rejection should be expected.
The material has been provided by InstaForex Company – www.instaforex.com