The US dollar, despite marked underperformance in the US dollar index, rallied to multi-month highs at 1.3388 against the Canadian dollar Thursday. Soft WTI prices, down more than 4.00%, weighed on the Canadian dollar and propped up the buck.
Technically, H4 price is seen nearing the 1.34 handle after overwhelming a number of key resistances. 1.34 is reasonably appealing from the H4 timeframe, joining closely with a 127.2% Fibonacci extension point at 1.3407, confirmed by the relative strength index (RSI) entering overbought territory.
Additional resistance is visible on the weekly timeframe, shaped by way of a trend line formation, taken from the high 1.3664 and the 2017 yearly opening level at 1.3434. By the same token, daily structure displays resistance around the 1.3382ish region.
1.34 may serve as a possible reversal zone today, having seen it boast strong connections to weekly and daily resistances. Noting heavy weakness in oil markets, though, traders are urged to wait for additional confirmation to form off 1.34 before committing. This could be something as simple as a bearish candlestick pattern, such as a shooting star configuration. As for an initial downside target, H4 support lies in wait around 1.3361.
Disclaimer: The information contained in this material is intended for general advice only.