US Dollar Near-term Technical Setups: USD/CAD, AUD/USD, GBP/USD
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Near-term Technical Outlook: USD/CAD, AUD/USD & GBP/USD
- Technical charts on trade setup we’ve been tracking in USD/CAD, AUD/USD & GBP/USD
- Loonie, Aussie & Sterling recoveries eyeing trend resistance
- New to Trading? Start here with Michael’s Foundations of Technical Analysis series
An update on trade setups we've been tracking inthe Canadian Dollar, Australian Dollar and the British Pound. These are the technical targets and invalidation levels that matter heading into next week. Review my latest Strategy Webinar for an in-depth breakdown of thesetrade setups and more.
Canadian Dollar Price Chart – USD/CAD Daily
In my latest Canadian Dollar Price Outlook we noted that, “is contracting within the April opening-range, just below confluence resistance. From a trading standpoint, we’re on breakout watch with the broader recovery at risk below 1.26.” Price held below monthly open resistance this week at 1.2562 with USD/CAD continuing to press the lows towards key support at 1.2468/84- a region defined by the 61.8% retracement of the March rally and the yearly low-day close. We’re looking for price inflection off this zone in the days ahead. A break / close below would likely fuel an accelerated Loonie run with such a scenario exposing the yearly close-low at the 1.24-handle. 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
- A summary of IG Client Sentiment shows traders are net-long USD/CAD - the ratio stands at +1.51 (60.14% of traders are long) – bearish reading
- Long positions are7.80% lower than yesterday and 4.49% higher from last week
- Short positions are 12.61% higher than yesterday and 13.73% lower 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 less net-long than yesterday but more net-long from last week. 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 Daily
In this week’s AUD/USD Technical Outlook we highlighted the Aussie breakout above the February trendline with, “the advance now targeting initial resistance objectives at the 50% retracement / 25% parallel at ~7770 with critical resistance just higher at the 2018 yearly open / 61.8% Fibonacci retracement at 7801/25- looking for a larger reaction there IF reached.” Price registered a high at 7761 this week before pulling back and the outlook remains unchanged into the close of the week.
While the broader focus remains higher, we’re on the lookout for possible topside exhaustion into these levels near-term. Ultimately, losses should be limited to the late-march highs at 7664 IF price is heading higher on this stretch. Broader bullish invalidation at he monthly open at 7593. A topside breach above the above this key threshold would keep the focus on the yearly high-day close at 7871. Review my latest Aussie Weekly Price Outlook for a closer 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
Sterling Price Chart – GBP/USD Daily
In my most recent Sterling Price Outlook we alerted readers to an outside-day reversal in GBP/USD as price rebounded sharply off confluence support at 1.3646/75. Our ‘bottom line’ kept the focus on this rebound while noting to, “look for possible topside exhaustion into the February trendline with a close below 1.3646 needed to validate a deeper correction.” The advance is now extending towards yearly slope resistance with the 100% extension of the advance eyed at 1.3857- area of interest for possible price inflection IF reached. A topside breach / close higher exposes the yearly high-week close at 1.3931 and more significant resistance at 1.3955/99. Monthly open support now 1.3781 with 1.3646/75 still critical. Review my latest Sterling Weekly Price Outlook for a closer look at the longer-term GBP/USD technical trade levels.
Sterling Trader Sentiment – GBP/USD Price Chart
- A summary of IG Client Sentiment shows traders are net-long GBP/USD - the ratio stands at +1.48 (59.65% of traders are long) – typically bearish reading
- Long positions are8.11% lower than yesterday and 11.33% lower from last week
- Short positions are0.16% lower than yesterday and 3.29% lower from last week
- We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests GBP/USD prices may continue to fall. Yet traders are less net-long than yesterday and compared with last week. Recent changes in sentiment warn that the current GBP/USD price trend may soon reverse higher despite the fact traders remain net-long.
-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.