Forex: USD/CAD Technical Analysis – Long Entry Setup Sought
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- USD/CAD Technical Strategy: Flat
- Support: 1.1134-63 (23.6% Fib exp., Triangle top)
- Resistance: 1.1241 (50% Fib exp.), 1.1319 (61.8% Fib exp.)
The US Dollar rose expected against its Canadian counterpart to complete a bullish Triangle chart pattern. Prices are now testing resistance at 1.1241, the 50% Fibonacci expansion, with a break above that on a daily closing basis exposing the 61.8% level at 1.1319. Near-term support is in the 1.1134-63 area, marked by the 38.2% Fib and the Triangle top.
Risk/reward considerations argue against entering long with prices so close to relevant resistance. On the other hand, taking up the short side looks premature absent a defined reversal signal. A Shooting Star candle does hint a indecision and opens the door for a pullback however. We will look to such a scenario to yield a more attractive long entry opportunity.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.