After the downtrend, USD/CAD formed a triple bottom near 1.1940 with a low of 1.1918 tested on May 14. While forming the triple bottom, the pair was ranging between 1.1940 and 1.2140. The price broke out of the range sending pair higher on May 19.
This did put the beginning of further extension up resulted in a breakout of the descending channel. Applying Fibonacci to the breakout point, we can see that 38.2% level (1.2345) has been taken out and could act as a support. This could confirm that the uptrend is not over yet.
For more risky trade consider buying at the current rate, although to stay on a safer side perhaps it is better to wait for a pullback before going long. The target is very clear and it is pointing up to the R1 (1.2444) resistance level that previously acted as very strong support. Only a break below S2 (1.2263) might drop the price further to S3 (1.2181), however the R1 should be tested with a high probability, maybe not as soon as it appears.
Support: 1.2345, 1.2263, 1.2181
Resistance: 1.2444, 1.2608
The material has been provided by InstaForex Company – www.instaforex.com