USD/CAD Technical Analysis: Opting to Remain in Long Trade

To receive Ilya's analysis directly via email, please SIGN UP HERE

Talking Points:

• USD/CAD Technical Strategy: Long at 1.2649
• Support: 1.2618, 1.2524, 1.2449
• Resistance: 1.2770, 1.2922, 1.3016

The US Dollar produced a Bearish Engulfing candlestick pattern, hinting a move lower against its Canadian namesake may be ahead. A daily close below the 76.4% Fibonacci expansion at 1.2618 exposes the 61.8% level at 1.2524. Alternatively, a push above the 1.2770-97 area (100% Fib, January 30 high) opens the door for a challenge of the 123.6% expansion at 1.2922.

We entered long USDCAD at 1.2649 and have since taken profit on half of the position. While the Bearish Engulfing candle setup is a worrisome development, confirmation of reversal is absent for now. With that in mind, the remainder of the position will remain in play with a stop-loss adjusted to the breakeven level.

Add these technical levels directly to your charts with our Support/Resistance Wizard app!

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