USD/CAD Technical Analysis – Upside Breakout Favored
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- USD/CAD Technical Strategy: Flat
- Support: 1.0805-13 (May 8 low, trend line)
- Resistance: 1.0927 (trend line), 1.1072 (23.6% Fib exp.)
The US Dollar may on the verge of resuming its advance against its Canadian counterpart after prices put in a bullish Piercing Line candlestick pattern. Near-term resistance is at 1.0927, marked by a falling trend line set from the March 20 high. A break above this barrier aims for the 23.6% Fibonacci expansion at 1.1072. Support is seen in the 1.0805-13 area, marked by the May 8 low and a falling trend line set from mid-February.
Risk/reward considerations argue against entering long with prices sitting squarely at relevant resistance. On the other hand, taking up the short side looks premature without a defined bearish reversal signal. We will remain flat for now, waiting for an actionable opportunity to emerge.
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.