USD/CAD Technical Analysis: Trying to Overcome 1.18 Mark

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Talking Points:

• USD/CAD Technical Strategy: Flat
• Support: 1.1559, 1.1488, 1.1431
• Resistance: 1.1673, 1.1744, 1.1801

The US Dollar continues to push higher against its Canadian counterpart after last week’s sharp breakout, rising to the highest level in over five years. A daily close above the 50% Fibonacci expansionat 1.1801 exposes the 61.8% level at 1.1858. Alternatively, a reversal below the 38.2% Fib retracement at 1.1744 opens the door for a challenge of the 23.6% threshold at 1.1673.

Risk/reward considerations argue against entering long with prices in close proximity to resistance. On the other hand, the absence of a defined bearish reversal signal suggests taking up the short 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

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com