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Fan Yang

USD/CAD - Pending Bullish Breakout

USD/CAD has been in a choppy bearish mode since June, it came up to almost 1.34 and then retreated. From the daily chart below, we can see that the pair has been in a falling channel in the past couple of months.

USD/CAD Daily Chart

(click to enlarge)

Pullback After Breakout:
- Before looking at the price action right now, let's look at the general price action since mid-2017.
- We can see that price was bearish, but bottomed in 2017 and eventually broke higher in 2018.
- Price broke above both a price bottom and above a falling resistance. Furthermore, price has held above the 200-day simple moving average (SMA). 
- The recent bounce from 1.29 also suggests the market is indeed in a bullish mode.
- Finally, the RSI held mostly above 40, which reflects maintenance of the prevailing bullish momentum when price bottomed and broke higher. 
- We should at least expect a retest of the current higher just under 1.34. If price breaks above 1.34, USD/CAD will open up the 1.38 area, which was around the 2017 high.