USD/CAD Technical Analysis: Range Support Back in Play

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Talking Points:

• USD/CAD Technical Strategy: Flat
• Support: 1.2213, 1.2105, 1.1997
• Resistance: 1.2384, 1.2562, 1.2673

The US Dollar declined against its Canadian namesake as expected after prices put in a Bearish Engulfing candlestick pattern. Near-term support is at 1.2213, the 38.2% Fibonacci expansion, with a break below that on a daily closing basis exposing the 50% level at 1.2105. Alternatively, a turn above the 1.2346-84 area (horizontal pivot, 23.6% Fib) clears the way for a test of the June 1 high at 1.2562.

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