USD/CAD Technical Analysis: Downturn May Be Ahead
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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 setting up for a downturn against its Canadian namesake after prices put in a Bearish Engulfing candlestick pattern. Near-term support is at 1.1311, the 23.6% Fibonacci retracement, with a break below that on a daily closing basis exposing the intersection of the 38.2% level and a rising trend line at 1.1215. Alternatively, a reversal 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.
The overall USDCAD trend has pointed upward for over two years. As such, we will treat any oncoming weakness as an opportunity to enter long at a more attractive level rather than a short trade setup. In the meantime, we remain flat.
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Daily Chart - Created Using FXCM Marketscope
--- 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.