USD/CAD Eyes Key Resistance Hurdle Ahead of Canada Retail Sales/CPI
- USD/CAD targets near-term resistance ahead of CPI / Retail Sales
- Updated targets & invalidation levels
Chart Created Using TradingView
Technical Outlook: USDCAD is trading within the confines of an ascending channel formation extending off last week’s low with the advance completing a 100% extension at 1.3088 earlier this week (interim resistance). Heading into tomorrow’s consumer price index (CPI) / retail sales release from Canada, the immediate focus remains higher while above near-term support at 1.3026.
That said, the pair is approaching a key resistance range at 1.3121/39 where the May high-day close & the July high converge on a pair of longer-term median-lines. A breach above this region would be needed to clear the way for the next leg higher targeting 1.3187 & the April high at 1.3219.
From a trading standpoint, heading into the release I would be looking to fade strength into the aforementioned key resistance on an exhaustion play. In the event the print prompts a break below the lower parallel, look for support at 1.2978/80 with broader bullish invalidation lower at the weekly / monthly open – 1.2924/35. For the complete setup and to continue tracking this trade 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 GBPJPY- the ratio stands at +1.01(50% of traders are long)-neutralreading
- Yesterday the ratio was +1.07. Short positions are 8.5% higher than yesterday and 29.6% above levels seen last week.
- Open interest is 5.8% higher than yesterday and 2.2% above its monthly average.
- Although the current SSI standing offers limited guidance, it’s worth noting that a build in short positions alongside increasing open interest suggests the near-term risk is for a move higher in the pair heading into tomorrow’s inflation & retail sales releases.
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Relevant Data Releases This Week
Other Setups in Play:
- AUD/JPY- View Weakness as an Opportunity
- EUR/USD Battle Lines Drawn Ahead of ECB- Levels To Know
- GBP/JPY at Brexit Levels- Elevated Risk for Declines on UK Employment
- GBP/USD Post-Brexit Rebound Eyes July High Ahead of UK CPI
- Webinar: USDOLLAR Threatens Breakout- Here are the Crosses to Watch
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---Written by Michael Boutros, Currency Strategist with DailyFX
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.