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Talking Points:
- USD/CAD Technical Strategy: Flat
- Support: 1.1182, 1.1098, 1.1052
- Resistance: 1.1251, 1.1364, 1.1477
The US Dollar may be topping against its Canadian counterpart, with a Bearish Engulfing candlestick pattern hinting at losses ahead. A daily close below channel top resistance turned support at 1.1166 exposes the 14.6% Fibonacci retracement at 1.1134, followed by the 23.6% level at 1.1080. Alternatively, a move above the 14.6% Fib expansion at 1.1209 opens the door for a challenge of the 23.6% threshold at 1.1239.
Risk/reward considerations argue against entering short with prices 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, waiting for a more actionable opportunity to present itself.
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Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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