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USD/CAD Technical Analysis: Long Position Triggered

USD/CAD Technical Analysis: Long Position Triggered

Ilya Spivak, Head Strategist, APAC

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Talking Points:

  • USD/CAD Technical Strategy: Long at 1.3247
  • US Dollar Back on the Offensive vs. Canadian Counterpart
  • Break of Early-August High Exposes Resistance Above 1.33

The US Dollar looks poised to continue pushing higher against its Canadian counterpart after prices cleared highs above the 1.32 figure set early in the month. The greenback is diverging against its top counterparts. While the currency’s average value against its top counterparts has been sliding, strength seems poised to return against commodity-bloc FX.

From here, the next level of resistance comes in at 1.3366, the 38.2% Fibonacci retracement, with a break above that on a daily closing basis exposing the 50% level at 1.3494. Alternatively, a reversal back below the 23.6% Fib at 1.3207 opens the door for a challenge of the 14.6% Fib at 1.3109.

Technical and risk/reward considerations appear attractive and we will now enter long, looking for USDCAD uptrend resumption. The trade will initially target 1.3366, with a stop-loss activated on a daily close below 1.3207. We will take profit on half of the position and move the stop to the breakeven level once the first objective is reached.

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.