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Talking Points:
- USD/CAD Technical Strategy: Long at 1.2649
- Support: 1.2916, 1.2797, 1.2696
- Resistance: 1.3047, 1.3127, 1.3258
The US Dollar put in a Shooting Star candlestick coupled with negative RSI divergence, hinting a pullback against its Canadian counterpart may be ahead. Near-term support is at 1.2916, the July 21 low, with a break above that on a daily closing basis exposing resistance-turned-support at 1.2797. Alternatively, a push above the 14.6% Fibonacci expansion at 1.3047 clears the way for a test of the 23.6% level at 1.3127.
We bought USDCAD at 1.2649and have since booked profit on half of the position. The rest of the trade will remain open to take advantage of any further gains ahead. The stop-loss has been moved to the breakeven level.
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--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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