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USD/CAD Strategy: Long Trade Triggered Near 1.34

USD/CAD Strategy: Long Trade Triggered Near 1.34

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Talking Points:

  • USD/CAD Technical Strategy: Long at 1.3399
  • Break Above August Swing Top Hints USDCAD Uptrend Resuming
  • Long Position Now in Play, Aiming for Advance Above 1.35 Figure

The US Dollar looks poised to continue higher against its Canadian counterpart after prices broke above resistance marked by Augusts’ swing top. Our prior long trade from 1.3247 was stopped out as the Loonie capitalized on a jump in oil prices butgains proved to be short-lived, as expected. It now looks like the pair is in the process of resuming the latest leg of its multi-year rising trend established from mid-May.

Near-term resistance is at 1.3559, the 38.2% Fibonacci expansion, with a break above that on a daily closing basis clears the way for a test of the 50% level at 1.3728. Alternatively, a reversal back below the 23.6% Fib at 1.3350 – now recast as support – opens the door for a challenge of the 14.6% level at 1.3221.

Positioning now seems attractive for another try at a USDCAD trade and we will enter long, initially targeting 1.3559. A stop-loss will be activated on a daily close below 1.3335. We will brook profit on half of the position and trail the stop-loss to the breakeven level once the first objective is hit.

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.