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Talking Points:
- USD/CAD Technical Strategy: Pending Long at 1.2500
- Support: 1.2491, 1.2354, 1.2236
- Resistance: 1.2646, 1.2827, 1.2973
The US Dollar may correct lower against its Canadian counterpart after prices put in a Hanging Man candlestick. Triangle pattern top resistance-turned-support is at 1.2491, with a break below that on a daily closing basis exposing the February 2 low at 1.2354. Alternatively, a push above the 23.6% Fibonacci expansionat 1.2646 clears the way for a test of the 1.2801-27 area (January 30 high, the 38.2% level).
Last week’s Triangle breakout argues for a bullish bias prices are too close to resistance to justify triggering a trade from a risk/reward perspective. With that in mind, we look for a pullback to enter long at 1.2500. If activated, the trade will initially aim for 1.2646 and carry a stop-loss set off on a daily close below 1.2354.
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Daily Chart - Created Using FXCM Marketscope
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
