USDCAD: Candle Setup Warns of Weakness
Prices put in a Bearish Engulfing candlestick pattern below resistance at 0.9861, the 38.2% Fibonacci retracement level, hinting a move lower is ahead. Initial support lines up at 0.9774, the 23.6% level, with a break below that exposing the September 14 low at 0.9632. Alternatively, a reversal through resistance targets the 50% Fib at 0.9932, a barrier reinforced by a falling trend line set from the June 4 high. Risk/reward considerations argue against entering a trade at current levels with prices so close to support and we will stand aside for now.
Daily Chart - Created Using FXCM Marketscope 2.0
Written by Ilya Spivak, Currency Strategist for Dailyfx.com
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