Overview:

During the past few weeks, the USD/CAD pair established a temporary consolidation zone between the price levels of 1.1560 and 1.1670. This price zone roughly corresponds to 61.8% prominent WEEKLY Fibonacci level bullish breakout above which allowed bulls to reach the price levels of 1.1850, 1.1950 and recently 1.2045 where new highs have been established.

The nearest H4 support that is the price zone of 1.1800-1.1750 provided excellent SUPPORT for the pair on Thursday. LONG positions were suggested at retesting.

Note the newly established short-term channel being expressed since the price level of 1.1750 extended up to 1.2050. It happened because the market looks quite overbought since bulls have pushed further above the upper limit of the long-term movement channel. Hence, bulls should be conservative with their targets.

This minor channel pattern may indicate bearish reversal, if confirmed, with H4 bearish breakdown of the lower limit and the recent support around the levels of 1.1870-1.1900.

Otherwise, if bulls keep defending the recent INTRADAY SUPPORT around 1.1920 down to 1.1850, the market bias will remain positive probably targeting at 1.2090.

Trading recommendations:

LONG positions are suggested at retesting the lower limit of the DAILY channel and 61.8% Fibonacci level (1.1750 - 1.1700) with SL placed below 1.1650.

Counter-trend risky traders can wait either for a bullish spike towards 1.2090, or for the H4 bearish breakdown below 1.1850 to SELL the pair aiming for 1.1750 and 1.1700.