Supply failed to break support in the 1.2460 – 1.2420 zone. Attempts lasted almost 5 days, however, bulls this time won and pushed USDCAD to the highest level since July 21st.
Bulls joy may not last long. Approximately 40 pips above the place where USDCAD is currently located is the upper limit of bearish channel. Breaking this level “from the march” seems unlikely. So in 1.2620 area you should expect an attempt to return to declines.
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Only a permanent overcoming of the upper limit of the channel will mean exit of this formation, and this will allow for a longer upward movement. The alternative scenario assumes a rebound from the upper limit of consolidation and USDCAD will soon arrive in support area of 1.2460 – 1.2420.
The indicated support is, however, the key level as seen below on the D1 interval, so bulls have a very good chance of reversing current downward trend here.