Last week, the USD/CAD currency pair quotations once again reached the confluence of support zones, where the horizontal level of 1.3380 coincides with the accelerated upward trend line starting from this year’s minimum. As can be seen in the daily chart below, this area again stopped sellers.
Attack on key resistance
As a result of the support confluence test, a bullish candle with a long shadow was formed, indicating the advantage of the demand side. In fact, buyers have returned and are pushing quotes to higher levels to this day.
The price has now reached the key resistance zone between 1,3505 – 1,3520, which includes the highs of the last month. What matters now is the result of the resistance test.
If the upward trend is to continue, we first need to complete the existing consolidation. The signal for a return to the trend may be the closing of the daily quotes above the resistance (1.3520). In this scenario, buyers would open their way to the next key level of defence at 1.3660.
Alternatively, maintaining resistance will indicate that the price will remain in the range where the nearest support that the price can target is the accelerated trend line discussed at the beginning.
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