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Talking Points:
- USD/CAD Technical Strategy: Long at 1.2649
- Support: 1.2618, 1.2524, 1.2449
- Resistance: 1.2770, 1.2922, 1.3016
The US Dollar produced a Bearish Engulfing candlestick pattern, hinting a move lower against its Canadian namesake may be ahead. A daily close below the 76.4% Fibonacci expansion at 1.2618 exposes the 61.8% level at 1.2524. Alternatively, a push above the 1.2770-97 area (100% Fib, January 30 high) opens the door for a challenge of the 123.6% expansion at 1.2922.
We entered long USDCAD at 1.2649and have since taken profit on half of the position. While the Bearish Engulfing candle setup is a worrisome development, confirmation of reversal is absent for now. With that in mind, the remainder of the position will remain in play with a stop-loss adjusted to the breakeven level.
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— Written by Ilya Spivak, Currency Strategist for DailyFX.com