Forex: USD/CAD Technical Analysis – Support Below 1.11 in Sight
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- USD/CAD Technical Strategy: Flat
- Support: 1.1067 (23.6% Fib ret.), 1.0970 (38.2% Fib ret.)
- Resistance: 1.1223 (Jan 31 high)
The Canadian Dollar is attempting to launch a recovery against its US namesake, with prices edging toward support at 1.1067 (marked by the 23.6% Fibonacci retracement). Breaking below this barrier initially exposes the 38.2% level at 1.0970. Near-term resistance is at 1.1223, the January 31 high.
In the context of our strategy, a short position at current levels would assume 1.1067 as a near-term objective and a stop-loss on a daily close above 1.1223. In keeping with at least a 1:1 risk reward ratio, this implies an entry price no lower than 1.1145. Furthermore, prices have yet to violate the series of higher lows defining January’s uptrend. On balance, that argues against a short position at current levels from a risk/reward as well as a tactical perspective.
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Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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