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Talking Points:
- USD/CAD Technical Strategy: Flat
- Support: 1.2382, 1.2239, 1.2039
- Resistance: 1.2573, 1.2691, 1.2882
The US Dollar renewed its push higher against its Canadian counterpart, with prices claiming a foothold above the 1.2500 figure. Near-term resistance is at 1.2573, the 14.6% Fibonacci expansion, with a break above that on a daily closing basis exposing the 23.6% level at 1.2691. Negative RSI divergence warns a reversal lower may be ahead however. A reversal below the January 27 low at 1.2382 opens the door for a challenge of a longer-term 123.6% expansion at 1.2239.
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 reversal signal suggests that taking up the short side is premature. With that in mind, we will remain flat for now.
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Daily Chart - Created Using FXCM Marketscope
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
