USD/CAD Technical Analysis: Waiting to Confirm Downturn
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- USD/CAD Technical Strategy: Flat
- Support: 1.2397, 1.2319, 1.2243
- Resistance: 1.2521, 1.2615, 1.2691
The US Dollar may have set a top against its Canadian namesake having produced a Bearish Engulfing candlestick pattern. Near-term support is in the 1.2397-1.2413 area (horizontal pivot, 23.6% Fibonacci retracement), with a break below that on a daily closing basis exposing the 38.2% level at 1.2319. Alternatively, a reversal above the 23.6% Fib expansion at 1.2521 clears the way for a test of the 1.2565-1.2615 zone (June 1 high, 38.2% expansion).
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.
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Daily Chart - Created Using FXCM Marketscope
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.