USD/CAD Rebound Vulnerable to Canada Employment- Key Support 1.2832
- USDCAD responds to near-term support ahead of Canada employment
- Updated targets & invalidation levels
Chart Created Using TradingView
Technical Outlook: USDCAD rebounded off structural support on building divergence yesterday shifting the near-term focus higher. We’ve been tracking this setup on SB Trade Desk and heading into tomorrow’s Canada employment report the risk remains weighted to the topside while above the July low at 1.2832.
Interim resistance stands at 1.2947 backed by the weekly open at 1.2982/85. A breach above this region would be needed to validate a larger advance for the dollar targetingthe 61.8% retracement at 1.3024 & the monthly open at 1.3104.
From a trading standpoint I would be looking to fade weakness while above the lower parallel (blue) with a break lower needed to invalidate the reversal play. Such a scenario would target support objectives at 1.2764 and the 2016 low-day close at 1.2723.For the complete setup and to continue tracking this trade & more throughout the week- Subscribe to SB Trade Desk.
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- A summary of the DailyFX Speculative Sentiment Index (SSI) shows traders are net longUSDCAD- the ratio stands at 1.51 (60% of traders are long)- bearish reading
- Long positions are 30.7% above levels seen last week while Short positions are 21.9% lower during the same time period.
- Open interest is 2.6% lower than yesterday and 6.8% above its monthly average
- The recent shifts in SSI positioning on USDCAD suggests traders are continuing to eye this current range as price comes off near-term support. Note that highs in SSI have coincided with lows in price over the last few months and as such, the risk remains for a near-term pop higher.
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Relevant Data Releases This Week
Other Setups in Play:
- EUR/USD ECB Setup- Outlook Remains Constructive Above 1.1140
- USDJPY: NFP Game-plan Same as Jackson Hole- Buy the Washout
- AUDUSD Searches for Support as NFPs Take Center Stage
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---Written by Michael Boutros, Currency Strategist with DailyFX
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