The USD/CAD currency pair has recently witnessed a significant development, breaking above the falling trend line on the 4-hour chart. This upside move from the 1.3631 level has extended as high as 1.3782, indicating that the previous downside move from the 1.3845 high has likely completed at the 1.3631 low.
With this bullish breakout, further rallies in the USD/CAD are anticipated in the coming days. The next target for the bulls is the previous high of 1.3845, which could act as a significant resistance level.
However, it’s important to note that the path higher may not be without obstacles. The initial support for the USD/CAD is currently situated at 1.3720. If the pair encounters selling pressure at this level and fails to break through convincingly, it could potentially lead to a pullback towards the 1.2750 area.
Should the USD/CAD break below the 1.2750 level, it could trigger another decline, potentially targeting the previous low of 1.3631. This scenario would invalidate the bullish breakout and potentially signal a continuation of the previous downtrend.
In summary, the USD/CAD has staged a bullish breakout, suggesting that the previous downtrend may have concluded. The pair is now targeting the 1.3845 level, which was the previous high. However, traders should remain vigilant for potential support at 1.3720 and resistance at 1.2750, as these levels could determine the pair’s near-term direction. A break below 1.2750 could potentially negate the bullish outlook and pave the way for another move towards the 1.3631 low.