USDCAD bulls are taking over the reins

On 26 September, USDCAD bulls officially took over the reins from bears on the daily timeframe.

This event was confirmed after bulls broke through a weekly resistance now turned support level, in the process making a higher top. Since this was preceded by a higher bottom, it indicated a change in market structure to an uptrend.

Bears reacted swiftly following this development and are busy re-testing the weekly support level. This presents some opportunities to traders that have the ability to make a net profit over a series of trades.

For a more detailed look at a possible long opportunity, the H4 time frame is helpful. The price is currently at the weekly support level having broken through and is bouncing off the 21 Simple Moving Average (SMA). The Momentum oscillator provides more confluence to the possible bullish momentum by being above the 100-base line.

Attaching a modified Fibonacci tool to the trigger level at 1.35465 and dragging it to just below the weekly support level at 1.34787, three possible targets can be established:

• The first target is possible at 1.35805 (Target 1) with risk management in mind.

• The second price target is likely at 1.36144 (Target 2) if the bulls have enough momentum to break through the next weekly resistance level.

• The third and last price target is probable at 1.36483 (Target 3) if the bullish momentum holds.

If the price at 1.34787 is broken, this scenario is no longer applicable.