The USD/CAD pair broke resistance which turned to strong support at the level of 1.2729 yesterday. The level of 1.2729 coincides with a golden ratio (50% of Fibonacci), which is expected to act as major support today.
The Relative Strength Index (RSI) is considered overbought because it is above 70. The RSI is still signaling that the trend is upward as it is still strong above the moving average (100). This suggests the pair will probably go up in coming hours. Accordingly, the market is likely to show signs of a bullish trend.
The level of 1.2850 will act as strong resistance and the double top is already set at the point of 1.2850. In other words, buy orders are recommended above 1.2850 with the first target at the level of 1.2966.
From this point, the pair is likely to begin an ascending movement to the point of 1.2966 and further to the level of 1.3000. On the other hand, if a breakout happens at the support level of 1.2729, then this scenario may become invalidated.
Forecast :
According to the previous events, the USD/CAD pair is still moving between the levels of 1.2729 and 1.3000; for that we expect a range of 219 pips (1.3000 - 1.2729) in coming days (2-3days).
If the USD/CAD pair fails to break through the resistance level of 1.3000, the market will decline further to 1.2797. This would suggest a bearish market because the RSI indicator is still in a positive area and does not show any trend-reversal signs. The pair is expected to drop lower towards at least 1.2729 with a view to test the daily pivot point.