Canadian Dollar Price Chart: Loonie Drives USD/CAD to Weekly Support
- USD/CAD testing key weekly support zone at 1.2972-1.3052– Focus is on the weekly close
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The Canadian Dollar is up more than 4% against the US Dollar since the May highs in USD/CAD with the recent sell-off in price taking Loonie into critical pivot zone. These are the updated targets and invalidation levels that matter on the Loonie (USD/CAD) weekly price chart. Review my latestWeekly Strategy Webinar for an in-depth breakdown of this gold price setup and more.
USD/CAD Price Chart - Loonie Weekly
Notes: In my last Loonie Weekly Price Outlook we highlighted that, “The focus remains on a drop towards key support at 1.3052/68 on the back of last week’s reversal. From a trading standpoint, look to reduce short-exposure / lower protective stops on a move towards the yearly range lows- look for a reaction there.” The 100% extension of the December decline extends the range to 1.2972-1.3052 and USD/CAD has been testing this support zone for the past three weeks.
Note that the 2017 trendline rests just lower and a break / close below this threshold is needed to validate a break of the yearly opening-range with such a scenario targeting 1.2782 and the 61.8% retracement at 1.2674. Weekly resistance stands at 1.3274 with broader bearish invalidation at the yearly high-week reversal close at 1.3371.
For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy
Bottom line: The immediate focus is on a reaction of this key zone at 1.2972-1.3052 – watch the weekly close. From a trading standpoint, look to reduce short-exposure / lower protective stops in this zone. IF this is a break of the yearly range-low and price is indeed heading lower, intra-week spikes should be capped by 1.3274. I’ll publish an updated Loonie Price Outlook once we get further clarity in near-term USD/CAD price action.
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Loonie Trader Sentiment (USD/CAD)
- A summary of IG Client Sentiment shows traders are net-long USD/CAD - the ratio stands at +1.5 (60.0% of traders are long) – bearish reading
- Traders have remained net-long since June 26th; price has moved 1.0% lower since then
- Long positions are 0.9% higher than yesterday and 12.6% lower from last week
- Short positions are 10.5% lower than yesterday and 12.3% 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. Traders are further net-long than yesterday & last week, and the combination of current positioning and recent changes gives us a stronger USD/CAD-bearish contrarian trading bias from a sentiment standpoint.
See how shifts in Loonie retail positioning are impacting trend- Learn more about sentiment!
Key US / Canada Data Releases
Previous Weekly Technical Charts
--- Written by Michael Boutros, Technical 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.