USD/CAD Technical Analysis – Struggling with Follow-Through
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- USD/CAD Technical Strategy: Flat
- Support: 1.0892 (14.6% Fib exp.), 1.0850 (23.6% Fib exp.), 1.0828 (double bottom?)
- Resistance: 1.0941 (May 21 high), 1.0991 (38.2% Fib ret.)
The US Dollar is in consolidation mode against its Canadian counterpart after recoiling from resistance above the 1.09 level. The first layer of support is at 1.0892, the 14.6% Fibonacci expansion, with a daily close below that targeting the 23.6% level at 1.0850. That is followed by a would-be double bottom at 1.0828. Alternatively, a daily close above 1.0941 – the May 21 high – opens the door for a challenge of the 38.2% Fib retracement at 1.0991.
Risk/reward considerations argue against entering short with prices sitting squarely at support. On the other hand, taking up the long side seems premature absent a defined bullish 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.