USD/CAD Technical Analysis: Loonie Recovers as Expected
To receive Ilya's analysis directly via email, please SIGN UP HERE
- USD/CAD Technical Strategy: Flat
- Support: 1.2556, 1.2421, 1.2187
- Resistance: 1.2801, 1.2881, 1.3036
The US Dollar declined against its Canadian counterpart as expected after putting in a Bearish Engulfing candlestick pattern. Near-term support is in the 1.2381-2421 area marked by the January 27 low and the 23.6% Fibonacci retracement, with a break below that on a daily closing basis exposing the 38.2% level at 1.2187. Alternatively, a reversal above the 14.6% Fib at 1.2566 opens the door for a challenge of the January 30 high at 1.2801.
Prices are too close to support to justify entering short from a risk/reward perspective. On the other hand, the absence of a defined bullish reversal signal suggests that taking up the long side is premature. With that in mind, we will remain flat for now.
Add these technical levels directly to your charts with our Support/Resistance Wizard app!
Daily Chart - Created Using FXCM Marketscope
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com