USD/CAD Technical Analysis: Channel Resistance Pressured
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- USD/CAD Technical Strategy: Flat
- Support: 1.2213, 1.2105, 1.1997
- Resistance: 1.2268, 1.2384, 1.2562
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 channel top resistance at 1.2268 clears the way for a test of the 1.2346-84 area (horizontal pivot, 23.6% Fib).
Prices are too close to resistance to justify entering long from a risk/reward perspective. On the other hand, the absence of a defined bearish reversal signal suggests that taking up the short 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
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.