USD/CAD Technical Analysis – Pivotal Trend Line Retested
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- USD/CAD Technical Strategy: Flat
- Support: 1.0669, 1.0620, 1.0570
- Resistance: 1.0700, 1.0750, 1.0790
The US Dollar rebounded as expected against its Canadian namesake after prices completed a bullish Piercing Line candlestick pattern. A daily close above resistance in the 1.0686-1.0700 area – marked by a trend line set from September 2012 and the 23.6% Fibonacci retracement – exposes the 38.2% level at 1.0749. Alternatively, a turn back below the 14.6% level at 1.0669 opens the door for a test of the July 3 low at 1.0620.
Risk/reward considerations argue against entering long with prices sitting just at resistance. On the other hand, the absence of a defined bearish reversal signal suggests taking up the short side is premature. We will remain flat for now.
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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.