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Talking Points:
- USD/CAD Technical Strategy: Flat
- Support: 1.2156, 1.2076, 1.1946
- Resistance: 1.2286, 1.2391, 1.2496
The US Dollar advanced against its Canadian counterpart as expected after prices produced a bullish Morning Star candlestick pattern. Near-term resistance is at 1.2286, the 38.2% Fibonacci retracement, with a break above that on a daily closing basis exposing the 50% level at 1.2391. Alternatively, a turn below the 23.6% Fib at 1.2156 opens the door for a challenge of the 14.6% retracement at 1.2076.
We maintain that the overall USDCAD trend favors the upside but a broad-based US Dollar pullback over the near to medium term looks likely. With that in mind, we will remain on the sidelines for now and look to enter long once the structural USD advance reasserts itself.
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Daily Chart - Created Using FXCM Marketscope
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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