After the overnight move to 1.3431, the highest level since 2004, the bearish threat to USD/CAD is beginning to fade, according to George Davis, Chief FIC Technical Analyst at RBC Capital Markets.
Davis thinks a daily close above Thursday’s high at 1.3415 would nullify the bearish shooting star pattern that has been hanging over USD/CAD since last week. Such a bullish breakout would shift the focus up to 1.3495 and 1.3600 thereafter.
Support is located at 1.3352, 1.3263 and 1.3120, with pullbacks toward 1.3120 expected to attract buying interest. With yesterday’s close clearing the August high at 1.3352, Davis is raising his 1-3 month technical price target from 1.3300 to 1.3600 (a 61.8% Fibonacci retracement of the 2002 to 2011 decline).