Forex: USD/CAD Technical Analysis – Buyers Reclaim 1.10 Figure
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- USD/CAD Technical Strategy: Pending Long
- Support: 1.1066 (23.6% Fib exp.), 1.1006 (14.6% Fib exp.)
- Resistance: 1.0970 (38.2% Fib ret.), 1.1067 (23.6% Fib ret.)
Our reticence to enter short USD/CAD yesterday proved prudent: prices launched a sharp recovery, soaring back over the 1.10 figure and clearing resistance at 1.1066 marked by the 23.6% Fibonacci expansion. Buyers now aim to challenge the 38.2% level at 1.1163, with a push above that exposing the 50% Fib at 1.1241. Alternatively, a turn back below 1.1066 eyes the 14.6% expansion at 1.1006.
Entering long with an initial target at 1.1163 while maintaining at least a 1:1 risk/reward ratio would require a stop-loss no lower than 1.0995. However, a reasonable invalidation points is lower at 1.0909, the February 19 low. With that in mind, we will hold off for now and look for a pullback to take the position.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com