Talking Points - USD/CAD Technical Strategy: Sidelines Preferred
- Psychologically-significant 1.1000 remains on the radar
- Recovery may be limited with bullish signal missing
After a suspenseful ride with several hints at a bounce, USD/CAD has finally broken below key support at 1.1000. However shorts may be precluded at this stage given that prices still remain within a familiar range between 1.0900 and 1.1300, which leaves noteworthy buying support close by. At the same time, with a bullish reversal signal missing there is doubt cast over a sustained recovery for the pair.
Daily Chart - Created Using FXCM Marketscope 2.0
Drilling down to the four-hour chart, the importance of the 1.1000 handle is made more evident. However, even as prices tease at an upside breakout, a recovery may prove limited given the lackluster reaction by traders to several prior bullish signals.
Created Using FXCM Marketscope 2.0
By David de Ferranti, Market Analyst, FXCM