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USD/CAD Strategy: Long Position Entered Above 1.30

USD/CAD Strategy: Long Position Entered Above 1.30

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Talking Points:

  • USD/CAD Technical Strategy: Long at 1.3010
  • Prices Edge Higher After Producing Bullish Morning Star Candlestick Pattern
  • Long Position Triggered Looking for Resumption of Long-Term Rising Trend

The US Dollar is edging higher having put in a bullish Piercing Line candlestick pattern, hinting a reversal higher against its Canadian counterpart may be in progress. The advance would mark resumption of the longer-term rising trend in play since July 2014.

The first layer of resistance is at 1.3125, the 14.6% Fibonacci expansion, with a break above that on a daily closing basis opening the door for a test of the 23.6% level at 1.3263. Alternatively, a reversal back below the October 12 low at 1.2900 clears the way for a challenge of double top resistance-turned-support at 1.2798.

Technical positioning now looks attractive to try re-entering the ascent launched in July 2014 and we will trigger a long position, initially targeting 1.3125. A stop-loss will be activated on a daily close below the 1.2900 figure. We will take profit on half of the position and adjust the stop-loss to the breakeven level once the first objective is reached.

Losing Money Trading Forex? This Might Be Why.

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