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- USD/CAD Technical Strategy: Flat
- Support: 1.0698, 1.0626-39, 1.0570
- Resistance: 1.0780, 1.0875, 1.0952
The US Dollar turned higher against its Canadian namesake as expected after prices completed a bullish Piercing Line candlestick pattern. A daily close above resistance is at 1.0780, the intersection of the 23.6% Fibonacci retracement and a falling trend line set from late March, exposes the 38.2% level at 1.0875. Alternatively, a reversal beneath the 14.6% Fib expansionat 1.0698 opens the door for a test of the 1.0626-39 area (23.6% expansion, July 2 low).
Risk/reward considerations argue against entering short with prices trading in close proximity to support. On the other hand, the absence of a defined bullish reversal signal suggests taking up the long side is premature. We will remain flat for now.
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Daily Chart – Created Using FXCM Marketscope 2.0
— Written by Ilya Spivak, Currency Strategist for DailyFX.com