USD/CAD – How Much Higher Will It Climb?

The pair has been moving to the upside for ten days now and it has risen with over 380 pips without making any significant retracement. Said move to the upside also formed a very obvious bullish trend channel.
The last highs of this powerful move to the upside even formed above the resistance trendline of that channel, but the pair quickly retraced back within its limits.

At first look the bullish trend seems exhausted, which begs the question – how much higher can this pair rise?
In my opinion, there are two most probable scenarios:

In the first one the pair will reach the previous high at 1.32413 and it will fall sharply or at the very least it will continue consolidating sideways until tomorrow, when the Federal Funds Rate will be announced.

In the second scenario the pair will continue rising to test 1.33000, which is a resistance zone formed by the Bollinger Bands indicator on the weekly time frame. This could happen today or tomorrow during and after the news.

I think, however, that regardless of which of those scenarios comes true, one thing is clear – the move to the upside cannot continue without a serious correction. We need to be very careful when trading this pair, so we wouldn’t miss the good entry point for short positions.