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Talking Points:
- USD/CAD Technical Strategy: Flat
- Support: 1.0981-95 (Triangle bottom, trend line), 1.0825 (38.2% Fib ret.)
- Resistance: 1.1142 (Triangle top), 1.1153-1.1223 (Mar 12, Feb 21, Jan 31 highs)
The US Dollar may be preparing to launch the next leg of its push higher against its Canadian counterpart. A period of consolidation since late January has taken the shape of a Triangle chart formation, a setup hinting at upside continuation. Clearing the Triangle top (now at 1.1142) exposes recent swing highs in the 1.1153-1.1223 area. Alternatively, a break below support at 1.0981 marked by the Triangle bottom and reinforced by a rising trend line set from late October (1.0995) exposes the 38.2% Fibonacci retracement at 1.0825.
The Triangle setup is not actionable until confirmation is seen on a daily close above the pattern’s upper boundary. We will wait for that to materialize before looking for an attractive long trade setup.
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Daily Chart – Created Using FXCM Marketscope 2.0
— Written by Ilya Spivak, Currency Strategist for DailyFX.com