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Talking Points:
- USD/CAD Technical Strategy: Flat
- Support: 1.2328, 1.2181, 1.2035
- Resistance: 1.2646, 1.2827, 1.2973
The US Dollar remains locked in a familiar range below the 1.27 figure against its Canadian counterpart after turning lower as expected. A daily close below the 1.2328-81area marked by the 38.2%Fibonacci retracement and the January 27 low exposes the 50% level at 1.2181. Alternatively, a turn above the 1.2602-46 region (trend line, 23.6% Fib expansion) clears the way for a test of the 1.2801-27 zone (January 30 high, 38.2% expansion).
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
