USD/CAD Technical Analysis: Rebound Meets Key Resistance
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- USD/CAD Technical Strategy: Flat
- Support: 1.0698, 1.0626-39, 1.0570
- Resistance: 1.0780, 1.0875, 1.0952
The US Dollar advanced as expected against its Canadian counterpart after putting in a bullish Piercing Line candlestick pattern. Near-term resistance is at 1.0780, the intersection of the 23.6% Fibonacci retracement and a falling trend line set from late March. A break above this barrier on a daily closing basis exposes the 38.2% level at 1.0875. Alternatively, a turn below support at 1.0698, the 14.6% Fib expansion, clears the way for a challenge of the 1.0626-39 area (23.6% expansion, July 2 low).
Prices are too close to resistance to justify entering long from a risk/reward perspective. On the other hand, the absence of a defined bearish reversal signal argues against taking up the short side. 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.