Skip to Content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

Free Trading Guides
Subscribe
Please try again
Select

Live Webinar Events

0

Economic Calendar Events

0

Notify me about

Live Webinar Events
Economic Calendar Events

H

High

M

Medium

L

Low
More View More
Canadian Dollar Outlook: USD/CAD Bears Emerge, but Can they Drive?

Canadian Dollar Outlook: USD/CAD Bears Emerge, but Can they Drive?

What's on this page

The Canadian Dollar is back on the offensive against US Dollar early in the week with USD/CAD paring a portion of the post-NFP advance. These are the updated targets and invalidation levels that matter on the USD/CAD weekly chart heading into FOMC. Review this week's Strategy Webinar for an in-depth breakdown of this Loonie price setup and more.

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

Canadian Dollar Chart – USD/CAD Daily

Canadian Dollar Price Chart - USD/CAD Daily - Loonie Trade Outlook - Technical Forecast

Chart Prepared by Michael Boutros, Technical Strategist; USD/CAD on Tradingview

Notes: The Canadian Dollar has continued to trade within the confines of a modified descending pitchfork formation we’ve been tracking off the yearly highs with price failing at the 75% parallel for the third consecutive week on Friday. Key weekly support rests at the confluence of the median-line and the 61.8% retracement of the October advance at 1.3151- a break / close below this threshold is needed to mark resumption of the broader downtrend targeting the 1.3052/58 backed by the 100% ext at 1.2972. Initial weekly resistance stands with the 2016 trendline (currently near ~1.3330) with a breach / close above the yearly high-week close / 61.8% retracement at 1.3355/70 needed to suggest a larger breakout is underway.

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

Bottom line: USD/CAD responded downtrend support AND resistance into the open of the month and the immediate focus is on a break of last week’s range for guidance. While a downside break is ultimately favored, we cannot rule out another high into slope resistance before a larger turn. I’ll publish an updated Canadian Dollar Price Outlook once we get further clarity on the near-term USD/CAD technical trade levels. .

Canadian Dollar Trader Sentiment – USD/CAD Price Chart

Canadian Dollar Trader Sentiment - USD/CAD Price Chart - Loonie Trade Outlook - Technical Forecast
  • A summary of IG Client Sentiment shows traders are net-short USD/CAD - the ratio stands at -1.72 (36.83% of traders are long) – bullish reading
  • Long positions are 25.87% higher than yesterday and 15.53% higher from last week
  • Short positions are21.23% higher than yesterday and 30.89% lower 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. Yet traders are less net-short than yesterday and compared with last week. Recent changes in sentiment warn that the current USD/CAD price trend may soon reverse lower despite the fact traders remain net-short.
USD/CAD Mixed
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily 5% 3% 4%
Weekly -32% 25% -8%
Learn how shifts in USD/CAD retail positioning impact trend
Get My Guide

---

Previous Weekly Technical Charts

Learn how to Trade with Confidence in our Free Trading Guide

--- 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.

DISCLOSURES