Forex: USD/CAD Technical Analysis – Support Sub-1.10 in Sight
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- USD/CAD Technical Strategy: Flat
- Support: 1.0970 (38.2% Fib ret.), 1.0892 (50% Fib ret.)
- Resistance: 1.1067 (23.6% Fib ret.), 1.1223 (Jan 31 high)
The Canadian Dollar has resumed its advance against its US counterpart as expected, with edging to support at our hypothetical short trade target at 1.0970 marked by the 38.2% Fibonacci retracement. A break below this boundary targets the 50% Fib at 1.0892.Alternatively, a reversal back above 1.1067 aims for the January 31 high at 1.1223.
The window to enter short has closed, with risk/reward considerations now skewed against entering a trade as prices hover near support. We continue to wait for a viable bullish reversal signal to enter long given the pair’s relationship with yield spreads in an environment where the priced-in 12-month policy outlook leans in favor of the greenback by a significant 31bps.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com