Forex: USD/CAD Technical Analysis – Preparing for a Long Trade
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- USD/CAD Technical Strategy: Pending Long
- Support: 1.1133-63 (23.6% Fib exp., Triangle top)
- Resistance: 1.1241 (50% Fib exp.), 1.1319 (61.8% Fib exp.)
The US Dollar pulled back as expected against its Canadian counterpart having secured a projected upside breakout out of 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 1.1133-63 area, marked by the 38.2% Fib and the Triangle top.
Risk/reward parameters have improved but a long entry window is yet to open. Assuming an initial upside target at 1.1241 and keeping in mind a 20-day ATR reading at 74, the trade needs to be triggered no higher than 1.1167. We will look for signs suggesting prices are holding at near-term support to identify such an 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.