USD/CAD Technical Analysis: 3-Month Uptrend Overturned
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- USD/CAD Technical Strategy: Flat
- Support: 1.1196, 1.1142, 1.1107
- Resistance: 1.1266, 1.1320, 1.1466
The US Dollar may have marked a critical reversal downward against its Canadian namesake after prices pierced a barrier guiding the uptrend since September. Near-term channel support is at 1.1196, with a break below that on a daily closing basis exposing the 38.2% Fibonacci retracement at 1.1142. Alternatively, a reversal above the 23.6% level at 1.1266 clears the way for a test of 1.1320, the intersection of the channel top and trend line support-turned-resistance.
Risk/reward considerations argue against entering short with prices in close proximity to support. On the other hand, the absence of a defined bullish reversal signal suggests taking up the long side is premature. We will remain flat for now, waiting for a more actionable opportunity to present itself.
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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.