USDCAD bounce off from the 61.8% retracement level, preparing for bullish rally

The USDCAD bulls lose control of the market after the pair hit the critical resistance level at 1.29121.From that level, the sellers took full control of this market and pushed this pair down towards the 61.8% bullish retracement level. (Drawn from the low of 08th September 2017 to the high of 27th October 2017.Though the sellers tried to breach the critical support level at 1.24056 for two consecutive times, the bulls regained their full control. Prior to the closing the last trading week the pair surged significantly higher and currently testing the minor resistance level at 1.25000.A daily closing of the price above that level will confirm the initial bottom formation of this pair at the critical support level at 1.20576.

USDCAD daily chart analysis

Figure: USDCAD bouncing off from the 61.8% bullish retracement level

From the above figure, you can clearly see that bulls are trying to regain their control of this market. If the pair manages to break the minor resistance level at 1.26100 on the basis of daily closing we might see another retest of the 200 day SMA (green line).On the contrary, if the bulls fail to breach the 100 day SMA ( red line) the bears will again try to breach the major support level at 1.24000 level. A clear break of that level will bring extensive selling pressure to the USDCAD pair and price will eventually fall towards the key support level at 1.20576.This level is very crucial for the investors since a clear break of that level will confirm the end of a medium term bullish trend for this pair.

USDCAD weekly chart analysis

Figure: USDCAD testing at a critical price zone

In the weekly chart, the overall bias is still slightly bullish. However as long as the weekly support level at 1.24000 holds, the price is most likely to go up. However if the current support level fails to clear out the 100 weekly SMA, we might see another retest of the long-term weekly trend line support at 1.22146.Most of the professional price action traders will be cautiously looking at this level since any bullish price action confirmation signal will be an excellent opportunity to place long orders. On the upside, the first bullish target for this pair is at 1.29124.This level is going to provide strong resistance to the USDCAD pair and we are most likely to experience ranging movement until it clears that resistance level. A weekly closing of the price above that level will ultimately lead this pair towards the broken trend line resistance at 1.35388.In the daily chart we have a nice bullish price action confirmation signal but in the weekly chart, the price is still trading at consolidation zone. If you follow the aggressive method of trading, long orders can be executed considering the current price action scenario. On the contrary, the conservative traders should wait for a clear breakout to trade this pair.