LOOKING FOR SETBACKS TO STALL OUT BY 1.1200; FRESH LONG IN PLAY
Usd/Cad: Yesterday we took a shot buying an oversold Eur/Cad hourly chart and exited the trade this morning at break-even after the market failed to produce the desired result. This morning we are once again exercising a bearish CAD trade but this time through the USD. Daily studies show some solid support at current levels by 1.1200 and this in conjunction with a severely oversold hourly RSI below 15, has attracted us to the current long position. The breakout back in June off of the yearly lows by 1.0785 had accelerated in the 1.1200 area and we look for this zone to now support the current round of setbacks ahead of a resumption of the broader up-move. Look for a medium-term higher low to now carve out at current levels and above 1.0785 ahead of an eventual retest and break back above 1.1725 over the coming weeks. Position: LONG @1.1205 FOR AN OPEN OBJECTIVE, STOP @1.1055.
Written by Joel Kruger, Technical Currency Strategist for DailyFX.com
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