Skip to Content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

Free Trading Guides
Subscribe
Please try again
Select

Live Webinar Events

0

Economic Calendar Events

0

Notify me about

Live Webinar Events
Economic Calendar Events

H

High

M

Medium

L

Low
More View More
USD/CAD Sentiment Hits Extremes Ahead of CPI- 1.2965 Critical Support

USD/CAD Sentiment Hits Extremes Ahead of CPI- 1.2965 Critical Support

Talking Points

  • USDCAD at key support at 1.2965/82 ahead of Canadian CPI
  • Release to threaten immediate short-bias
  • Updated targets & invalidation levels

USDCAD 30min

Chart Created Using FXCM Marketscope 2.0

Technical Outlook: USDCAD is testing a critical support confluence at 1.2968/81 – this level is defined by the 61.8% retracement of the advance off the May low, the 100% extension of the decline off the 2016 high, a median-line parallel extending off the January 29th high and an embedded channel support extending off the February 4th low. Although we’re likely to see some recovery off this mark, it’s important to keep in mind the broader outlook remains weighted to the downside on account of an objective break of the weekly opening-range lows.

That said, the immediate short-bias is at risk while above this support level heading into Canada’s inflation report tomorrow. Should the core consumer price index highlight sticky price growth, look for continued CAD strength (USDCAD weakness) with a break below support targeting subsequent objectives at 1.2899, the October low-day close at 1.2861 & 1.2831.

Look for a weaker than expected read to offer a reprieve for the greenback with such a scenario eyeing initial topside resistance objectives at 1.3039, the 1.31-handle, last week’s low at 1.3171 & the weekly open at 1.3218. Note that a breach above key resistance at the September high-day close / 61.8% retracement at 1.3420/61 is needed to shift the broader focus back to the topside for the pair. Continue tracking this setup and more throughout the week- Subscribe to SB Trade Desk and take advantage of the DailyFX New Subscriber Discount!

Avoid the pitfalls of near-term trading strategies by steering clear of classic mistakes. Review these principles in the "Traits of SuccessfulTraders” series.

  • The DailyFX Speculative Sentiment Index (SSI) shows the retail crowd remains net-long USD/CAD since February 25th with the reading hitting fresh extremes this week as it crossed above the +1.50 mark.
  • Even as USD/CAD comes up against near-term support, the ratio has advanced to +1.82 as long positions jumped 11.1% from the previous week, while short positions narrowed 15.9% during the same period.

Why and how do we use the SSI in trading? View our video and download the free indicator here

Relevant Data Releases This Week

Other Setups in Play:

Looking for more trade ideas? Review DailyFX’s Top Trading Opportunity of 2016

---Written by Michael Boutros, Currency Strategist with DailyFX

Follow Michaelon Twitter @MBForex contact him at mboutros@dailyfx.com or ClickHere to be added to his email distribution list

Join Michael for Live Scalping Webinars on Mondays on DailyFX and Tuesday, Wednesday & Thursday’s on SB Trade Desk at 12:30 GMT (8:30ET)

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

DISCLOSURES