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Canadian Dollar Forecast: Key USD/CAD Levels to Watch

Canadian Dollar Forecast: Key USD/CAD Levels to Watch

2020-08-19 09:30:00
Justin McQueen, Analyst
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CAD Analysis and Talking Points

  • USD/CAD | Downtrend Remains Intact
  • Unwind of Short CAD Positioning Risks Accelerating USD/CAD Losses
  • Canadian Dollar Technical Levels

USD/CAD | Downtrend Remains Intact

The theme of US Dollar remains intact, particularly in USD/CAD with the persistent downtrend hitting fresh post COVID lows following a break below support at 1.3170. In turn, given that there is little in the way of notable support, USD/CAD raises the risk of accelerating losses towards the 1.3000 handle. Alongside this, the latest CFTC data highlights that speculators remain short on the Canadian Dollar and thus an unwind of bearish bets provides scope for USD/CAD to fall further. On the topside, resistance is situated at 1.3200, whereby below this level maintains the bearish bias in USD/CAD.

USD/CAD MIXED
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily -6% -7% -6%
Weekly -11% -1% -9%
What does it mean for price action?
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Canadian Dollar Technical Levels

Support

Resistance

1.3065

38.2% Fib

1.3200

-

1.3000

-

1.3250

-

1.2957

2020 Low

1.3315

Jun 10th Low

Elsewhere, it is important to keep one eye on oil prices, which has also underpinned the recovery in CAD. In the short term, focus will be on the OPEC meeting, however, little is expected in the way of new policy as OPEC maintains its stance to gradual taper production cuts.

G10 FX Moving Averages

Canadian Dollar Forecast: Key USD/CAD Levels to Watch

USD/CAD Price Chart: Weekly Time Frame

Canadian Dollar Forecast: Key USD/CAD Levels to Watch

Source: IG Charts

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