USD/CAD On the Defensive Ahead of BoC
- USDCAD immediate short-bias at risk into BoC
- Updated targets & invalidation levels
Chart Created Using TradingView
Technical Outlook: USDCAD failed to close above key resistance noted last week at the May high-day close at 1.3121 with the pullback breaking back below the weekly open, keeping the near-term focus lower in the pair heading into tomorrow’s Bank of Canada interest rate decision. Interim support rests at 1.2985 backed by 1.2949 & the monthly open at 1.2924 – both areas of interest for possible exhaustion / long-entries.
Resistance stands at 1.3015/22 backed by the weekly open at 1.3041- A breach above key resistance shifting the focus back towards key resistance at 1.3087-1.3104. Note that a close above 1.3121 is still needed to validate a breakout of the broader triangle consolidation pattern we’ve been tracking since the yearly low. Continue tracking this setup and more throughout the week- Subscribe to SB Trade Deskand take advantage of the DailyFX New Subscriber Discount.
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- A summary of the DailyFX Speculative Sentiment Index (SSI) shows traders are net long USDCAD- the ratio stands at +1.21(55% of traders are long)-weakbearishreading
- Yesterday the ratio was -1.09. Long positions are 15.3% higher than yesterday and 3.4% above levels seen last week.
- Open interest is 0.9% higher than yesterday and 3.1% below its monthly average.
- The recent flip from net-short suggests that the long-bias remains vulnerable- Immediate risk is for further declines near-term towards structural support
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Relevant Data Releases This Week
Other Setups in Play:
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- Webinar: USD Crosses in Focus as Rally Eyes Key Resistance Targets
- USD/CAD Risks Near-term Breakout on NFPs / Canada Employment
- AUD/USD is Constructive - Threatens Resistance Break
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---Written by Michael Boutros, Currency Strategist with DailyFX
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.