While there is no sign yet of a trend reversal for USD/CAD, the oversold nature of daily studies suggests that the pace of the correction is slowing, according to George Davis, Chief FIC Technical Analyst at RBC Capital Markets.
This means that Davis is more comfortable in starting to scale into long USD/CAD positions as part of his core medium-term bullish view. He thinks moves to support at 1.2953 and 1.2872 will attract buying interest, and a daily close above the old double bottom at 1.3120 will place the uptrend back on firmer footing. Additional resistance is located above at 1.3299 and 1.3454 (the cyclical high).
Davis’ 1 to 3 month technical price target is located at 1.3600, which is a 61.8% Fibonacci retracement of the 2002-2011 decline.