USD/CAD Consolidation to Face Bank of Canada
- USDCAD consolidation in focus heading into BoC- Broader focus lower sub-1.3430
- Updated targets & invalidation levels
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Technical Outlook:Last week we noted that USDCAD was, “USDCAD is testing near-term channel resistance & heading into the close of the week the focus is against the 1.3430/50 zone. Initial support rests at 1.3360/70 backed by the monthly / weekly open at 1.3310. A break below Friday’s low at 1.3284 would be needed to mark a more meaningful reversal in the pair targeting 1.3252 & 1.3184”- this level now also converges on the 100% ext of the decline off the March highs.
Heading into the Bank of Canada interest rate decision tomorrow our levels remain unchanged and we’ll be looking for a break of this consolidation range. From a trading standpoint, I’ll favor selling strength while below the weekly open with our broader bearish invalidation steady at 1.3431.
- A summary of the DailyFX Speculative Sentiment Index (SSI) shows traders are net-long USDCAD- the ratio stands at +1.04 (50.9% of traders are long)- weak bearish reading
- Long positions are 23.4% higher than yesterday and 20.6% higher from last week
- Short positions are 2.2% lower than yesterday and 10.9% lower from last week
- SSI is virtually split here but the marked increase in long exposure since the March extremes continues to highlight the risk for further USD losses near-term.
Relevant Data Releases
Other Setups in Play:
- AUD/NZD Trapped- Rebound at Risk Below 1.09
- AUD/JPY: Sell-off Approaches Initial Support Hurdles
- GBP/USD: Fret Not, a Resolution is at Hand- Critical Support 1.23
- AUD/USD: RBA Game Plan & Levels to Know
- Written by Michael Boutros, Currency Strategist with DailyFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.