Review and dynamics
After reaching the lows at the level of 1.2525 at the end of April, the pair USD/CAD has been moving in the range of 1.2635 levels (Fibonacci 50% to the rise since the beginning of July 2014 from the level of 1.0650) and 1.3100 (Fibonacci 38.2%). Ascending triangle has been formed on the daily chart with the lower limit near the level of 1.2845, and the upper just above the level of 1.3080 (ЕМА200 and ЕМА144 on the daily chart) and 1.3100 (Fibonacci 38.2%).
Generally, ascending triangle refers as a bullish pattern. In the current situation, it could indicate descending trend and probability if the rise in price. The rise in price will be possible if the pair USD/CAD consolidates above the level of 1.3100.
On 4-hourly and weekly charts the indicators OsMA and Stochastic give signals for long positions. The indicators on the daily and monthly charts also suggest to open long positions. The nearest support level is 1.2950 (ЕМА200, ЕМА144 on 4-hour chart).
Considering that the USD is going up, while oil prices are going down, the pair can break out the upper limit of the triangle and resistance level of 1.3100 and continue to rise up to 1.3300 and 1.3680 (Fibonacci 23.6%).
An alternative scenario suggests that the pair can go back to the range and the lower limit of the triangle at the level of 1.2845 after breakout of the support level of 1.2950 (ЕМА50 on the daily chart and ЕМА200, ЕМА144 on 4-hour chart).
Break out of the level of 1.2845 can bring the pair back to the downtrend with the nearest targets of 1.2730, 1.2635 and 1.2525.
Support levels: 1.2950, 1.2880, 1.2845, 1.2730, 1.2635 and 1.2525.
Resistance levels: 1.3080, 1.3100, 1.3185, 1.3200, 1.3300, 1.3400, 1.3500 and 1.3680.
Buy on the market. Stop-Loss: 1.2930. Take-Profit: 1.3080, 1.3100, 1.3185, 1.3200, 1.3300, 1.3400 and 1.3500.
Sell Stop: 1.2920. Stop-Loss: 1.2960. Take-Profit: 1.2845, 1.2800, 1.2730, 1.2635 and 1.2525.
In the contracting triangle
Support level of 1.2950