USD/CAD Technical Analysis: Deeper Losses May Be Ahead
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- USD/CAD Technical Strategy: Flat
- Support: 1.1188, 1.1142, 1.1110
- Resistance: 1.1321, 1.1389, 1.1466
The US Dollar may have begun a significant downward reversal against its Canadian counterpart after prices overcome support guiding the uptrend since September. A daily close below channel support at 1.1188 exposes the 38.2% Fibonacci retracement at 1.1142. Alternatively, a reversal above the intersection of the channel top and trend line support-turned-resistance at 1.1321 opens the door for a challenge of the 23.6% Fib expansion at 1.1389.
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 signal suggests taking up the short side is premature. With that in mind, we will remain on the sidelines for the time being.
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Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com