USD/CAD Technical Analysis: Attempting to Break Lower
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- USD/CAD Technical Strategy: Flat
- Support: 1.1116, 1.1021, 1.0945
- Resistance: 1.1308, 1.1379, 1.1450
The US Dollar may be forming a top against its Canadian namesake after putting in a Bearish Engulfing candlestick pattern. Near-term support is in the 1.1098-1.1116 area, marked by the September 15 high and the 23.6% Fibonacci retracement, with a break below that on a daily closing basis exposing the 38.2% level at 1.1021. Alternatively, a reversal above the 1.1278-1.1308 zone bracketed by the March 20 high and the 38.2% Fib clears the way for a test of the 50% threshold at 1.1379.
Prices are too close to support to justify entering short from a risk/reward perspective. On the other hand, the absence of a defined bullish reversal signal suggests taking up the long side is premature. With that in mind 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.