USD/CAD Technical Analysis – Waiting to Re-Establish Long
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- USD/CAD Technical Strategy: Flat
- Support: 1.0861 (trend line), 1.0828 (double bottom?)
- Resistance: 1.0923 (23.6% Fib ret.), 1.0941 (May 21 high), 1.0991 (38.2% Fib ret.)
The US Dollar may be readying to move higher in earnest against its Canadian namesake after prices took out resistance at a falling trend line set from late April. Near-term resistance is at 1.0923, the 23.6% Fibonacci retracement, with a break above that on a daily closing basis exposing the May 21 high at 1.0941 and the 38.2% level at 1.0991. Alternatively, a turn back below the trend line (now recast as support) at 1.0861 exposes a would-be double bottom at 1.0828.
Risk/reward considerations argue against entering long with prices sitting squarely at resistance. On the other hand, taking up the short side seems premature absent a defined bearish reversal signal. We will remain flat for now.
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.