Overview:

The USD/CAD pair has been trending upwards within the bullish channel depicted on the WEEKLY chart.

The market looks overbought since bulls have pushed further above the upper limit of both depicted bullish channels as well as the 79.6% Fibonacci level. That is why the ongoing sideways movement was anticipated.

The nearest SUPPORT level to meet the USD/CAD pair is located around 1.2300 (79.6% Fibonacci level) that should be defended by bulls in order to maintain enough bullish momentum.

Note that successive lower highs were established within the wedge-pattern depicted on the DAILY chart. It could be a reversal or continuation pattern as further price action indicates.

Bullish persistence above 1.2650 - 1.2680 (recent highs) enhances further bullish advancement towards 1.2780-1.2800 initially.

On the other hand, another closure below the price level of 1.2580 (recent SUPPORT) exposes the next DAILY SUPPORT around 1.2350 and 1.2300 where 79.6% Fibonacci level is located.

Trading recommendations:

Risky traders can benefit from the short-term bullish breakout above the wedge-pattern. BUY trigger is the DAILY closure above 1.2650. T/P levels should be set at 1.2800 and 1.2880.

However, given such high prices, conservative traders should be waiting for signs of bearish reversal to SELL the pair around the upper limit of the wedge-pattern.