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USD/CAD - 3 Lines of Defense

The USD/CAD has been bullish for a little over 2 weeks after rebounding from 1.2126. This rally has put the 2015-highs in the 1.28-1.2834 area in sight, but is stalling at 1.2633 as we wind down the week.

USD/CAD 4H Chart 7/3
(Click to enlarge) 

The 4H chat shows the market retreating a bit from 1.2633. We are also seeing some rejection at 1.26 during the 7/3 US session. This suggests that the market is still in bearish correction mode in the near-term. On the chart, we can see 3 lines of defense for the bullish outlook, or against the bearish outlook. First, the 1.2450-1.2455 area could provide support. This was a previous support pivot, and price will be close to a rising trendline if it slides to this area. The 1.2422 resistance pivot is the next line of defense, strengthened further by the 200-period simple moving average and a rising trendline. 

If if the first two defenses fall, price is likely breaking the rising trendline. However, this break would not be enough to signal a bearish reversal. The 1.2350-1.2365 area contains the 200-, and 100-period SMA as well as a previous support/resistance pivot area. A break below this area would likely shelf the bullish outlook for the time being. A break below 1.23 however might open up further bearish correction in the medium-term.