USDCAD today challenged the key resistance at 1.3230. Price has broken out of the bearish channels and this is a very important trend reversal signal. Price reached our stop level at 1.3230 and got rejected. Price is back testing the break out area.
Red lines - medium-term bearish channel
Green rectangle - horizontal resistance
USDCAD is pulling back towards the upper boundary of the red channel. Price usually back tests the break out area. Bulls now need to step in and break to new higher highs above 1.3230. If this happens then price could continue higher towards 1.3350-1.34. Price has started making higher highs and higher lows. Breaking out of the bearish channel has put on hold our bearish view for a move towards 1.29. Now it seems more likely to continue higher towards 1.34. Next support is at 1.31. With price now at 1.3156 we prefer to go long with 1.31 stop and 1.34 target. We look to add on longs on a break above 1.3260.