USD/CAD Technical Analysis: Torn Between Conflicting Cues
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- USD/CAD Technical Strategy: Flat
- Support: 1.1440, 1.1312, 1.1190
- Resistance: 1.1518, 1.1595, 1.1691
US Dollar technical positioning against its Canadian counterpart has become clouded by conflicting considerations. On one hand, a break above the 38.2% Fibonacci expansion at 1440 appears to have exposed the 50% level at 1.1518, with a further push beyond that eyeing the 61.8% Fib at 1.1595. However, the appearance of a bearish Dark Cloud Cover candlestick pattern warns a turn downward may be ahead, with a push below 1.1440 clearing the way for a test of 1.1312, the intersection of the December 1 low and a rising trend line set from late August.
Risk/reward considerations argue against entering short given the pair’s proximity to support. On the other hand, entering long in the face of a significant bearish signal seems ill-advised. As such, we will remain flat for now until greater clarity emerges.
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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.