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USD/CAD Back to Threaten Key Support Around 1.2350

USD/CAD broke above a triangle resistance this week, but the latest price action shows weakness in this breakout. In fact, price retreated after the break and is now tagging 1.24 and threatening to test the 1.2350 triangle support.

USD/CAD 4H Chart 2/25
(click to enlarge)

The fact that the break to the upside was a fake-out makes the support vulnerable at 1.2350. A false breakout can indeed translate into a bearish breakout. If that happens, we might have another round of bearish correction. Now, if price can rally back above 1.25, the support might hold after all, and the bullish trend will still be in play with upside towards the 1.28 handle, and with risk of breaking towards the 1.30-1.3060 highs from 2008-2009.