USD/CAD Plunge into Support- Exhaustion Risk

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Canadian Dollar Technical Price Outlook: Short-Term Trading Levels

  • Canadian Dollar updated technical trading levels – Daily and Intraday Letters
  • USD / CAD four-week breakdown stops in technical downward support
  • Resistance 1.2440, September channel (key) – support 1.22849 (key), 1.2247, 1.2208

The Canadian dollar is virtually unchanged against the US dollar since the beginning of the week despite a range of almost 1% with a four-week decline in USD / CAD taking price into another major support obstacle. These are the updated targets and invalid levels that matter on the US dollar/CAD price charts go to key data on U.S. inflation tomorrow. Review my newest Webinar Strategy for deep failure of this technical Loonie layout and more.

Canadian Dollar Price Chart – USD / CAD Daily

Canadian Dollar Price Chart - USD / CAD Daily - US Dollar vs. Canadian Dollar Business Outlook - Loonie Technical Forecast

Diagram Prepared by Miguel Boutros, Technical Strategist; USD / CAD at Tradingview

Technical Perspective: In my last Canadian Dollar Price Outlook we noticed that USD / CAD traded just above the key support at 1.2422 / 40 while warning that “decreasing from here would threaten another attack of losses to a later one support targets at the low March / 61.8% retracement at 1.2365 / 66 and the July lows at 1.2302. ” Price recorded a low at 1.2288 today before rebounding from the September channel support. Is short-term exhaustion low?

Canadian Dollar Price Chart – USD / CAD 120min

Canadian Dollar Price Chart - USD / CAD 120min - US Dollar against Canadian Dollar Business Outlook - Loonie Technical Forecast

Notes: A closer look at Loonie price action shows USD / CAD trading within an embedded downward channel from a sharper slope. Support remains constant at the 1.618% extension of the September decline / July low at 1.2284-1.2302 – a break below this threshold could stimulate another profit loss with such a scenario exposing the 2018 minimum at 1.2247 and the 78.6% retracement at 1.2208– both areas of interest for possible disadvantage exhaustion IF achieved. Initial rexistence now back to the March low / 61.8% Fibonacci reproach of the annual range at 1.2365 / 66 supported by 1.2422 / 40 with a break / close over the channel necessary to shift the focus higher again.

Bottom line: USD / CAD sales have responded to supportive support and we are looking for possible pricing here. From a trading point of view, a good zone to reduce short exposure / lower protective stops – rebounds should be limited by 1.2440 IF the price goes lower. Ultimately we are looking for a downside exhaustion in the previous days and a larger recovery could offer more favorable entries closer to trend resistance. Review my newest Canadian Dollar Weekly Price Outlook for a closer look at the longer-term technical trading levels of USD / CAD.

For a complete breakdown of Michael’s business strategy, review his Foundations of Technical Analysis series on Building a Trading Sstrategy

Canadian Dollar Trader Sentiment – Price chart of USD / CAD

Canadian Dollar Trader Sentiment - USD / CAD Price Chart - US Dollar vs. Canadian Dollar Pot Position - Loonie Technical Outlook

  • Summary of IG Customer Sense shows that traders are net-long USD / CAD – the ratio stands at +2.68 (72.83% of traders are long) – usually bassist legacy
  • Long positions are3.11% lower than yesterday and 5.39% higher than last week
  • Short positions are 14.68% lower than yesterday and 5.34% lower than last week
  • We usually take an opposite view to crowd sentiment, and the fact that traders are neatly long suggests that USD / CAD prices will continue to fall. Traders are up longer than yesterday and last week, and the combination of current positioning and recent changes gives us a stronger USD / CAD lower counter trading bias from I feel standpoint.

Key US / Canadian Data Publications

United States / Canada Key Data - USD / CAD Economic Calendar - Loonie Weekly Event Risk

Economic Calendarlatest economic developments and upcoming event risk.

Active Technical Settings

– Written by Miguel Boutros, Currency Strategist with DailyFX

Follow Mmechael on Twitter @MBForex



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