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Talking Points:
- USD/CAD Technical Strategy: Flat
- Support: 1.2311, 1.2193, 1.2002
- Resistance: 1.2502, 1.2590, 1.2792
The US Dollar may have formed a top against its Canadian namesake marked by the appearance of a Bearish Engulfing candlestick pattern. A daily close below the 14.6% Fibonacci retracement at 1.2311 exposes the 23.6% level at 1.2193. Alternatively, a turn above the January 27 high at 1.2502 clears the way for a challenge of the 76.4% Fib expansion at 1.2590.
While a short position seems compelling from a purely technical perspective, we are leery of taking new directional bets on USD-based pairs as major event risk by way of the FOMC policy announcement looms ahead in the coming hours. With that in mind, we will remain flat for now.
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Daily Chart - Created Using FXCM Marketscope
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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