Never miss a story from Michael Boutros

Subscribe to recieve updates on publications
Please enter valid First Name
Please fill out this field.
Please enter valid Last Name
Please fill out this field.
Please enter valid email
Please fill out this field.
Please select a country

I’d like to receive information from Daily FX and IG about trading opportunities and their products and services via email.

Please fill out this field.

Your Forecast Is Headed to Your Inbox

But don't just read our analysis - put it to the rest. Your forecast comes with a free demo account from our provider, IG, so you can try out trading with zero risk.

Your demo is preloaded with £10,000 virtual funds, which you can use to trade over 10,000 live global markets.

We'll email you login details shortly.

Learn More about Your Demo

You are subscribed to Michael Boutros

You can manage you subscriptions by following the link in the footer of each email you will receive

An error occurred submitting your form.
Please try again later.

The Canadian Dollar is on the offensive with news of a renewed US / Mexico / Canada trade agreement further supporting the Loonie early in the week. Here are the updated targets and invalidation levels that matter on the USD/CAD charts heading into the start of October trade. Review this week’s Strategy Webinar for an in-depth breakdown of this setup and more.

USD/CAD Daily Price Chart

USD/CAD Price Chart - Daily

Technical Outlook: In my most recent Weekly Technical Perspective on the USD/CAD, we highlighted a key confluence support zone at 1.2880– with, “The risk remains weighted to the downside in USD/CAD while below 1.3130.” Price gapped lower into the weekly / monthly open with the decline marking a break below 2018 up-trend support (purple) and the 200-day moving average. Initial daily support now rests with the lower 50-line of the descending pitchfork formation extending off the yearly highs.

New to Forex Trading? Get started with this Free Beginners Guide

USD/CAD 240min Price Chart

USD/CAD Price Chart - 240min

Notes: A closer look at Canadian Dollar price action further highlights the weekly gap open with the opening range high converging on the 38.2% retracement of the 2017 advance at 1.2880. We’ll reserve the Friday close at 1.2908 as our near-term bearish invalidation level with a breach / close above needed to shift the focus back to the long-side.

Initial support eyed at 1.2778 backed by 1.2724/28- a region is defined by the confluence of the 50% retracement and the 100% extension pf the June declines. Look for a more significant reaction off that threshold with a break lower eyeing subsequent support targets at the lower parallel, currently ~1.2663.

Why does the average trader lose? Avoid these Mistakes in your trading

Bottom line: The focus remains lower in USD/CAD with price now approaching initial support targets. From a trading standpoint, look to reduce short-exposure / lower stops at these levels with a near-term recovery in price to offer more favorable entries while below 1.2908. Keep in mind that we are heading into the end of the start of a new month / quarter with key employment data from both the U.S. and Canada on Friday likely to fuel added volatility in USD/CAD price action- tread lightly.

For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy

USD/CAD Trader Sentiment

USD/CAD Trader Sentiment
  • A summary of IG Client Sentiment shows traders are net-long USD/CAD - the ratio stands at +1.56 (60.9% of traders are long) – bearish reading
  • Traders have remained net-long since September 14th; price has moved 1.4% lower since then
  • Long positions are32.1% higher than yesterday and 14.5% lower from last week
  • Short positions are 26.8% higher than yesterday and 20.7% higher from last week
  • We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests USD/CAD prices may continue to fall. However traders are more net-long than yesterday but less net-long from last week and the combination of current positioning and recent changes gives us a further mixed USD/CAD trading bias from a sentiment standpoint.

See how shifts in USD/CAD retail positioning are impacting trend- Learn more about sentiment!

---

Relevant USD/CAD Economic Data Releases

USD/CAD Economic Calendar

Economic Calendar - latest economic developments and upcoming event risk. Learn more about how we Trade the News in our Free Guide!

Active Trade Setups

- Written by Michael Boutros, Currency Strategist with DailyFX

Follow Michael on Twitter @MBForex or contact him at mboutros@dailyfx.com