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- USD/CAD Technical Strategy: Long at 1.0811
- Support: 1.0919, 1.0885, 1.0846
- Resistance:1.0987-1.1001, 1.1044, 1.1087
The US Dollar may weaken against its Canadian counterpart before resuming a rally following the emergence of a Piercing Line candle pattern, as expected. The case for a downswing hinges on the appearance of a Bearish Engulfing formation coupled with negative RSI divergence. Near-term support is at 1.0919, marked by a rising trend line set from early July. A break below that on a daily closing basis exposes the August 18 close at 1.0885, followed by the 38.2% Fibonacci retracement at 1.0846. Alternatively, a turn above the 1.0985-1.1001 zone bracketed by the August 6 high and the 38.2% Fib expansion clears the way for a challenge of the 50% threshold at 1.1044.
We entered long USDCAD at 1.0811 and have since taken profit on half of our exposure. The rest remains open to capture any further upside momentum with a stop-loss adjusted to the breakeven level.
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Daily Chart - Created Using FXCM Marketscope 2.0