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.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View More
USD/CAD - Minor Top or Just A Consolidation?

USD/CAD - Minor Top or Just A Consolidation?

Kristian Kerr, Sr. Currency Strategist

Talking Points

  • USD/CAD testing key support zone
  • Broader technical picture still quite positive

Unfamiliar with Gann Square Root Relationships? Learn more about them HERE.

USD/CAD continues to chop around in a sideways to lower range below the 1.3212 multi-year high recorded earlier in the month. Following the breakout in July above the 2009 high the medium-to long-term technical outlook is clearly favorable with a move through Fibonacci resistance at 1.3170 and of course the high at 1.3212 needed to set off a run higher towards the 61.8% retracement of the 2002 – 2007 decline near 1.3500. The current correction from the high has been relatively tame thus far given some of the other moves in G10 FX. Of course a lot of this has to do with the relentless offer in crude, though with sentiment in the commodity falling to contrarian “red flag” levels of just 6% bulls yesterday the time may be approaching for at least a modest turn around in oil and CAD. The low end of a median line channel drawn from the May low has supported downside attempts thus far, but is getting tested again today. A daily close below this level (currently around 1.3080) would be an early warning sign that the correction is starting to gain some traction. However, a clear break of last week’s low near 1.2950 is probably needed to turn the near-term technical picture more convincingly negative.

To receive other reports from this author via e-mail, sign up to Kristian’s e-mail distribution list via this link.

USD/CAD Daily Chart: August 21, 2015

Chart Prepared by Kristian Kerr

LEVELS TO WATCH

Resistance: 1.3170 (Fibonacci), 1.3212 (MTD high)

Support: 1.3080 (Andrews), 1.2950 (MTD low)

Strategy: Sell USD/CAD on a break

Entry: More aggressive traders can look to sell funds on a close below 1.3080 while my conservative traders can wait for a move under 1.2950 before looking to sell on rallies.

Stop: Daily close back over 1.3170

Target: Open

--- Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com

To contact Kristian, e-mail instructor@dailyfx.com. Follow me on Twitter at@KKerrFX.

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

DISCLOSURES