USD/CAD Technical Analysis: Readying to Turn Lower?
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- USD/CAD Technical Strategy: Flat
- Support: 1.1204, 1.1145, 1.1092
- Resistance: 1.1329, 1.1361, 1.1406
The US Dollar may be on the verge of a downturn against its Canadian namesake as negative RSI divergence hints at fading upside momentum. Near-term support is at 1.1204, the 23.6% Fibonacci retracement, with break below that on a daily closing basis exposing a rising channel floor at 1.1145. Alternatively, a push above the 38.2% Fib expansion at 1.1329 opens the door for a challenge of the channel top at 1.1361, followed by the 50% threshold at 1.1406.
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 that taking up the short 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