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Talking Points:
- USD/CAD Technical Strategy: Flat
- Support: 1.2956, 1.2798, 1.2670
- Resistance: 1.3102, 1.3212, 1.3327
The US Dollar continues to correct lower against its Canadian namesake, hitting the lowest level in two weeks. Near-term support is at 1.2956, the 23.6% Fibonacci retracement, with a break below that on a daily closing basis exposing the 38.2% level at 1.2798. Alternatively, a move above the July 24 high at 1.3102 clears the way for a test of the August 5 top at 1.3212.
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 an actionable opportunity to present itself.
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— Written by Ilya Spivak, Currency Strategist for DailyFX.com