Talking Points
- USD/CAD holding within bearish formation ahead of CAD CPI, Retail Sales
- Updated targets & invalidation levels
USDCAD 60min
Chart Created Using TradingView
Technical Outlook: USDCAD continues to trade within the confines of a well-defined descending channel formation off last week’s high with the decline now approaching initial support at the key 61.8% retracement of the advance off the 2016 low at 1.2764. Heading into tomorrow morning’s Canadian Consumer Price Index (CPI) & retail sales release, the focus remains lower while below channel resistance / 1.2832 with broader bearish invalidation eyed at the 1.2924 resistance confluence.
A break lower targets the 2016 low-day closer at 1.2723 & the June low-day close at 1.2692 – both areas of interest for possible short exhaustion / long-entries. Keep in mind that today will mark the ninth consecutive day of declines- previous instances have seen near-term interruptions before continuing lower. From a trading standpoint, I would be looking to fade strength while below 1.2830, ultimately looking for long-entries lower down into structural support. For the complete setup and to continue tracking this trade& 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 +1.85 (65% of traders are long)- bearish reading
- Yesterday the ratio was 1.57. Long positions are 13.9% higher than yesterday and 21.3% above levels seen last week.
- Open interest is 7.1% higher than yesterday and 9.5% above its monthly average.
- Current retail positioning keeps the focus lower for now and we’ll be looking for a build in bullish sentiment heading into fresh monthly lows for signs that the short-side bias may be waning.
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Relevant Data Releases This Week
Other Setups in Play:
- AUDJPY into Fresh Monthly Lows Ahead of AU Employment
- NZD/USD Advance Eyes Key Hurdle at 7300 Ahead of Labor Report
- EUR/USD: Respect this Slope Ahead of Upcoming Data- SSI Points Higher
- Webinar: USD Crosses in Focus- Levels to Know Ahead of CPI
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---Written by Michael Boutros, Currency Strategist with DailyFX
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