USDCAD remains at the top of my watch list this week. After an impressive 2,200 pip rally from July of 2014 to January of 2015, the pair has been consolidating for the better part of five months.
Trading channel breakouts is one of my favorite patterns to play, mostly due to the precise entry that can be had with the right amount of patience and discipline.
In the case of USDCAD that entry would be triggered on a daily close above channel resistance. From there the 1.2560 level would act as resistance, however a larger move to retest the multi-year high at 1.2800 is a plausible scenario.
On the flip side, a daily close below 1.2200 would open up the door for a move lower into the 1.20 region.
Summary: Wait for a daily close above channel resistance and then watch for a retest as new support. Key resistance comes in at 1.2560, 1.2680 and 1.2800. Alternatively, a daily close below 1.2200 would see downward pressure resume toward 1.20.