USD/CAD Technical Analysis: Double Top in the Works?
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- USD/CAD Technical Strategy: Flat
- Support: 1.1311, 1.1215, 1.1138
- Resistance: 1.1466, 1.1518, 1.1595
The US Dollar may be forming a double top against its Canadian counterpart marked by the appearance of a Bearish Engulfing candlestick pattern. A daily close below the 23.6% Fibonacci retracement at 1.1311 exposes the intersection of the 38.2% level and a rising trend line at 1.1215. Alternatively, a turn above the 1.1440-66 area marked by the 38.2% Fib expansion and the November 5 high opens the door for a challenge of the 50% threshold at 1.1518.
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