Forex: USD/CAD Technical Analysis – Long Position Held for Now
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- USD/CAD Technical Strategy: Long at 1.1166
- Support: 1.1068-97 (Triangle), 1.1003 (38.2% Fib ret.)
- Resistance: 1.1163 (38.2% Fib ret.), 1.1241 (50% 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 re-testing the Triangle top (1.1097) as support. A break below this and the Triangle bottom (1.1068) exposes the 38.2% Fibonacci retracement at 1.1003. Near-term resistance is at 1.1163, the 38.2% Fib expansion. This is followed by the 50% expansion at 1.1241.
We entered long at 1.1166 yesterday, initially targeting 1.1241. Yesterday’s sharp selloff has certainly amounted to a significant hurdle for the trade, but our stop-loss (set to trigger on a daily close below 1.1092) remains intact and Triangle top resistance-turned-support held up. We will begrudgingly hold the position and see how things develop from here.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com