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USD/CAD, AUD/USD Near-term Technical Setups

USD/CAD, AUD/USD Near-term Technical Setups

Michael Boutros, Strategist

Near-term Technical Outlook: Trade Setups on USD/CAD & AUD/USD

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An update on trade setups we've been tracking inthe Canadian Dollar & Australian Dollar. These are the targets and invalidation levels that heading into the close of the week.Review my latest Strategy Webinar for an in-depth breakdown of thesetrade setups and more.

Canadian Dollar Price Chart - USD/CAD 240min

Canadian Dollar Price Chart - USD/CAD 240min - Loonie Trade Outlook - Technical Forecast

Chart Prepared by Michael Boutros, Technical Strategist; USD/CAD on Tradingview

In last month’s Canadian Dollar Price Outlook we noted that USD/CAD was testing major support into the close of February, “with a weekly close below 1.2579 needed to keep the short-bias viable in the days ahead.” Price failed to mark a weekly close below this threshold with the pullback marking an outside-day reversal off the lows last week. The focus is once again on support here at the 61.8% Fibonacci retracement of the recent rally / 2018 yearly open at 1.2575/79 backed by the April 2018 low / lower parallel near 1.2527- looking for downside exhaustion ahead of this region IF price is indeed heading higher with a breach above resistance at 1.2713/23 exposing subsequent topside objectives at 1.2785/93 and the yearly range highs at 1.2881. Review my latest Canadian Dollar Weekly Price Outlook for a closer look at the longer-term USD/CAD technical trading levels.

Canadian Dollar Trader Sentiment – USD/CAD Price Chart

Canadian Dollar Trader Sentiment - USD/CAD Price Chart - Loonie Retail Positioning
  • A summary of IG Client Sentiment shows traders are net-short USD/CAD - the ratio stands at 1.92 (65.7% of traders are long) –typically bearish reading
  • Long positions are 1.01% higher than yesterday and 8.50% lower from last week
  • Short positions are 2.80% lower than yesterday and 26.44% higher from last week
  • We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests USD/CAD prices may continue to fall. Traders are more net-long than yesterday but less net-long from last week and the combination of current positioning and recent changes gives us a further mixed USD/CAD trading bias from a sentiment standpoint.

Australian Dollar Price Chart - AUD/USD 240min

Australian Dollar Price Chart - AUD/USD 240min - Aussie Trade Outlook - Technical Forecast

Chart Prepared by Michael Boutros, Technical Strategist; AUD/USD on Tradingview

Last week we noted that the recent AUD/USD breakout looked vulnerable as the rally showed signs of exhaustion into the close of February trade. An outside-day reversal off the highs (and an outside-weekly reversal) further highlighted the threat for a deeper pullback into the March open.

A weekly opening-range has been set just above the March open at 7710 and below the 7801/37 resistance zone. We’re looking for the break for guidance with the broader threat for a deeper correction while below the yearly high-day close at 7871. A break lower from here exposes 7659 backed by 7618/35- look inflection there with a close below needed to keep the focus on 7563 and the 100% extension at 7523. Review my latest Aussie Weekly Price Outlook for a look at the longer-term AUD/USD technical trade levels.

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

-Written by Michael Boutros, Currency Strategist with DailyFX

Follow Michaelon Twitter @MBForex

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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