The USD/CAD broke out to new 3-week highs yesterday, surging through previous resistance near the Monthly R1 Pivot at 1.0220. A large Bullish Marubozu candle foreshadowed the breakout and further gains to come in today’s early European trade, a development which has now emerged. At this point, the pair has room to run up to test the 2-month high around 1.0285 next, and buy opportunities will be favored ahead of the weekend.
One way to play the breakout is to set a limit buy order at 1.0230 (just ahead of previous-resistance-turned-support at 1.0220) with a stop at 1.0195 (back below the 1.0200 round handle) and a target at 1.0275 (ahead of previous resistance at 1.0285).
This trade would be invalidated if not triggered by the end of this week’s trade.