Forex: USD/CAD Technical Analysis – Four-Month Support Tested
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- USD/CAD Technical Strategy: Flat
- Support: 1.0978 (trend line), 1.0859 (38.2% Fib ret.)
- Resistance: 1.1019 (23.6% Fib ret.), 1.1126 (horizontal pivot)
The US Dollar dropped to a monthly low against its Canadian namesake after reversing lower as expected above the 1.12 figure. Sellers are testing rising trend line support at 1.0978, with a break downward exposing the 38.2% Fibonacci retracement at 1.0859. Alternatively, a turn above the 23.6% Fib at 1.1019 aims for a horizontal pivot at 1.1126.
Prices are too close to relevant support to justify entering short from a risk/reward perspective. On the other hand, the absence of a bullish reversal signal hints it is premature to take up the long side. We will continue to stand aside for now.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com