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Talking Points:
- USD/CAD Technical Strategy: Flat
- Support: 1.2956, 1.2798, 1.2670
- Resistance: 1.3087, 1.3212, 1.3321
The US Dollar turned sharply lower against its Canadian namesake, breaking below a rising trend line guiding prices higher since mid-June. 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 turn above the 1.3054-87 area (14.6% Fib, trend line) clears the way for a test of the August 5 high at 1.3212.
We entered long USDCAD at 1.2649 and have since taken profit on half of the trade. We have now exited the remainder of the position and will look for new opportunities to enter long in line with the broader trend following whatever pullback is now in the cards.
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— Written by Ilya Spivak, Currency Strategist for DailyFX.com