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- USD/CAD Technical Strategy: Long at 1.1166
- Support: 1.1131-63 (38.2% 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 support at 1.1163, the 38.2% Fibonacci expansion, with a break below that eyeing the Triangle top at 1.1131. Near-term resistance is at 1.1241, the 50% level. A reversal above that initially exposes the 61.8% Fib at 1.1319.
The downward retracement over the past three sessions has improved risk/reward parameters sufficiently to attempt a long position from here. We will initially target 1.1241 and set a stop-loss to trigger on a daily close below 1.1092. Profit on half of the position will be booked and the stop-loss moved to breakeven on meeting the first objective.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com