USD/CAD Range-break with Trend Points to Lower Prices
- USD/CAD breaks multi-week range, below 200-day
- Break in-line with trend, looking to June low, 2017 trend-line
USD/CAD underwent a five-week-long sideways move that finally broke yesterday with price closing below 13458. The lower boundary of the range was built upon the 200-day MA, with several turns higher making for increasingly important support. Broken support now becomes resistance.
Looking lower the next level of solid support arrives around the June lows; intra-day low at 13315 and lowest daily close at 13380. A break through the lows will have the 2017 trend-line up next as the targeted objective. The trend-line connects not only the 2017 low, but also the 2018 and 2019 troughs, making it a big spot should price fall to that point. It lies around ~13200.
To negate the bearish outlook and possibly turn USD/CAD bullish, it needs to break solidly back inside the range and above the upper parallel/trend-line running off the March high. This could have a spark effect as the market is caught leaning the wrong way. But until evidence of a reversal develops, running with a short bias looks to be the most prudent play for now.
USD/CAD Daily Chart (broke range)
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.