USDCAD Technical Analysis: risk/reward considerations argue against entering long with prices in close proximity to resistance

The US Dollar has moved to challenge January’s swing high against its Canadian counterpart near the 1.28 figure. Near-term resistance is in the 1.2733-1.2801 area, marked by the 23.6% Fibonacci expansion and the January 30 high, with a break above that on a daily closing basis exposing the 38.2% level at 1.2968. Alternatively, a turn below range top resistance-turned-support at 1.2635 clears the way for a test of the February 3 low at 1.2354.

• Support: 1.2635, 1.2354, 1.2239
• Resistance: 1.2801, 1.2968, 1.3158

Risk/reward considerations argue against entering long with prices in close proximity to resistance. On the other hand, the absence of a defined bearish reversal signal suggests taking up the short side is premature. We will remain flat for now, waiting for a more actionable opportunity to present itself.