USD/CAD Technical Analysis: Key Support Near 1.24 Figure

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Talking Points:

• USD/CAD Technical Strategy: Flat
• Support: 1.2397, 1.2319, 1.2243
• Resistance: 1.2521, 1.2615, 1.2691

The US Dollar may be preparing to turn lower against its Canadian counterpart following the appearance of a Bearish Engulfing candlestick pattern. A daily close below the 1.2397-1.2413 area (horizontal pivot, 23.6% Fibonacci retracement) exposes the 38.2% level at 1.2319. Alternatively, a move above the 23.6% Fib expansion at 1.2521 opens the door for a challenge of the 1.2565-1.2615 zone (June 1 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 an actionable opportunity to present itself.

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Daily Chart - Created Using FXCM Marketscope

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