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  • Gold could suffer further near-term losses due to rising U.S. Treasury yields and a weak technical picture for price action. Get your weekly gold forecast from @DColmanFX here: https://t.co/g9QvH3L4It https://t.co/Vz98E0Bl9U
  • Gold has been trending lower after failing to clear resistance in the $1835 area earlier this month. Get your $XAUUSD market update from @DColmanFX here:https://t.co/3hm1g3BHgf https://t.co/MdTQKEBCBx
  • Key break here in the 10-year #Treasury yield as it rises to the highest since late June Took out 1.4230 resistance, and the 100-day SMA Eyes now on the 38.2% Fib extension at 1.4775 Also potential falling resistance from March https://t.co/4cI6l210ui
  • The move in rates after this week’s FOMC has continued and the 10 year yield has pushed up to a fresh two-month-high. Get your market update from @JStanleyFX here:https://t.co/CRWhuZ3sxD https://t.co/svHHqN2Zz8
  • S&P 500 contending with its proverbial ‘line in the sand’ as bulls and bears battle for directional control. How we close/trade around the 50-day moving average could serve as a noteworthy bellwether for risk trends headed into next week. I remain cautious below ~4,480. $SPX $ES https://t.co/qogkjs1Sx2
  • USD/JPY trades to a fresh monthly (110.57) amid the pickup in longer-dated US Treasury yields, and the exchange rate may stage a larger advance over the coming days. Get your market update from @DavidJSong here:https://t.co/dlNXOrJnM9 https://t.co/LCQd26W1zF
  • US yields continue to climb, with the 10-year Treasury yield trading above 1.45% $ZN $ZB https://t.co/N4EDfwD3nZ
  • $USDJPY bull thesis appears quite constructive. Technicals show topside breakout above trend resistance following a period of consolidation. Bond yields providing the fundamental catalyst. Eyes on Aug/YTD highs. A broad-based deterioration in market sentiment poses downside risk. https://t.co/AazskXGjHq
  • WTI posting another session of strong gains, currently flirting with the 74 handle $CL #Oil #OOTT https://t.co/oYnm2OYRky
  • The New Zealand Dollar’s bullish breakout attempt in early-September was rebuffed. Price action at the end of the month is telling a different story. Get your market update from @CVecchioFX here:https://t.co/AquMSrssne https://t.co/DtFuFfrS7Q
Canadian Dollar Price Outlook: USD/CAD- Break or Bend, Monthly Highs

Canadian Dollar Price Outlook: USD/CAD- Break or Bend, Monthly Highs

Michael Boutros, Strategist

The Canadian Dollar is virtually unchanged against the US Dollar this week with USD/CAD trading just below key resistance into the close of the month / quarter. We’re looking for a break of the weekly opening-range with the broader outlook still weighted to the topside. These are the updated targets and invalidation levels that matter on the USD/CAD charts. Review this week’s Strategy Webinar for an in-depth breakdown of this setup and more.

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USD/CAD Daily Price Chart

USD/CAD Price Chart - US Dollar vs Canadian Dollar Daily

Technical Outlook: In my latest USD/CAD Technical Outlook our bottom line noted that price had, “responded to confluence support and while the immediate threat is higher, the recovery remains vulnerable sub-1.3437. From a trading standpoint, look to reduce long-exposure on a move towards Fibonacci resistance and be on the lookout for possible price exhaustion.” USD/CAD has continued to hold just below this key threshold with the long-bias still vulnerable while below.

Key confluence support rests at 1.3308/25 – a region defined by the 61.8% retracement of the mid-March advance, the 100-day moving average and the 2018 pitchfork support. Weakness beyond this zone would exposes 1.3248 (bullish invalidation)- look for a larger reaction there IF reached. Ultimately a topside breach / close above 1.3437 is needed to mark resumption targeting the upper parallel around ~1.3520.

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USD/CAD 120min Price Chart

USD/CAD Price Chart - US Dollar vs Canadian Dollar 12min minute

Notes: A closer look at price action shows Loonie trading within the confines of an ascending pitchfork formation extending off last week’s lows with the weekly opening-range taking shape just below the 1.3435/37 resistance barrier. Initial support rests with the median-line around 1.3385 backed by the 38.2% retracement at 1.3370- a break there would shift the focus towards subsequent support objectives at 1.3347 and 1.3325- both levels of interest for possible exhaustion / long-entries. A topside breach targets the March high at 1.3467 backed by the upper parallel around ~1.3515.

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Bottom line:The focus is on a reaction at this key resistance zone and while the broader outlook remains weighted to the topside, the advance remains vulnerable near-term. USD/CAD has set a well-defined weekly opening-range just below resistance- look for the break. From a trading standpoint we’ll favor fading weakness while within this formation targeting a topside breach. Keep in mind we’re heading into the close of the month / quarter with Canada GDP and US Personal Consumption Expenditure (PCE) on tap tomorrow morning – stay nimble.

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 - US Dollar vs Canadian Dollar Price
  • A summary of IG Client Sentiment shows traders are net-short USD/CAD- the ratio stands at -1.48 (40.3% of traders are long) – bullish reading
  • Long positions are0.6% lower than yesterday and unchanged from last week
  • Short positions are 8.5% higher than yesterday and 38.0% higher from last week
  • We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests USD/CAD prices may continue to rise. Traders are further net-short than yesterday & last week, and the combination of current positioning and recent changes gives us a stronger USDCAD-bullish contrarian trading bias from a sentiment standpoint.

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

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Relevant US / CanadaEconomic Data Releases

US / Canada Economic Data Releases

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

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- Written by Michael Boutros, Currency Strategist with DailyFX

Follow Michael on Twitter @MBForex

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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