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.

Free Trading Guides
EUR/USD
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
GBP/USD
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
USD/JPY
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Bearish
Oil - US Crude
Bearish
Bitcoin
Mixed
More View more
Real Time News
  • And here are a few #ASEAN, Asia #EmergingMarkets event risk: Dec 10 - Philippine Trade Balance 🇵🇭 - Chinese CPI 🇨🇳 Dec 12 - Philippine Central Bank rate decision 🇵🇭 - Indian CPI and Industrial Production 🇮🇳 - Malaysian Industrial Production 🇲🇾 And US-China #TradeTalks https://t.co/PlXqgVR6Dt
  • $GBPUSD Daily Pivot Points: S3: 1.2823 S2: 1.2876 S1: 1.2908 R1: 1.2961 R2: 1.2982 R3: 1.3035 https://www.dailyfx.com/pivot-points?ref=SubNav?utm_source=Twitter&utm_medium=DFXGeneric&utm_campaign=twr
  • French Technology Minister says France is in favor for international tax on tech deal $EUR $SPX
  • $USDJPY Daily Pivot Points: S3: 107.65 S2: 108.42 S1: 108.7 R1: 109.48 R2: 109.98 R3: 110.76 https://www.dailyfx.com/pivot-points?ref=SubNav?utm_source=Twitter&utm_medium=DFXGeneric&utm_campaign=twr
  • #DAX off its recent highs, but only looking like a pullback so far. Get your technical analysis from @PaulRobinsonFX here: https://t.co/jRvUcmDJ5s https://t.co/VXZFT8s8FN
  • $GBPUSD is catching some serious traction. I haven't been paying attention, but these polls are having an effect. Cable now at mid-point of past two-year range and 5-year trendline resistance https://t.co/ZtVQDuaPtA
  • OPEC+ agreement is for cut of 500k bpd according to delegate -BBG
  • #EURGBP has plummeted to a 19-month low while #GBPCAD and #GBPUSD are re-testing critical resistance channels. #GBPAUD has reached a three-year high but will upside momentum last? https://www.dailyfx.com/forex/technical/article/special_report/2019/12/05/British-Pound-Technical-Analysis-EURGBP-GBPUSD-GBPCAD-GBPAUD.html
  • Saudi Oil Minister says decision will be given tomorrow #OOTT #OPEC
  • $EURUSD Daily Pivot Points: S3: 1.0883 S2: 1.097 S1: 1.1025 R1: 1.1112 R2: 1.1145 R3: 1.1232 https://www.dailyfx.com/pivot-points?ref=SubNav?utm_source=Twitter&utm_medium=DFXGeneric&utm_campaign=twr
USD/CAD Technical Analysis: A Case Study On Not Fighting Breakouts

USD/CAD Technical Analysis: A Case Study On Not Fighting Breakouts

2017-04-25 17:00:00
Tyler Yell, CMT, Currency Strategist
Share:

Can CAD rebound in 2Q? See our forecast to find out what’s driving market trends!

Talking Points:

  • USD/CAD technical strategy:favoring CAD weakness continuing
  • Options market insight points to longer-term CAD weakness
  • CAD Trader Sentiment shows the number of traders net-short is 76.4% higher WoW

The problem with a weak currency is that bad news is exasperated, and thegood news is often aggressively discounted. This morning, news hit the wires that appear to be re-stoking fears of US-CA trade conflicts. Thisdevelopment opens up the risk that the Canadian Dollar, already the weakest G8 currency could continue to weaken toward the 61.8% retracement of the 2016 range at 1.3838 vs. the USD.

Many traders could point to the argument that CAD is oversold on the possible 24% tariff on softwood lumber. However, it’s fair to say as well that Markets are a forward discounting mechanism, and often an erratic one at that. We can see that events often fail to happen in isolation, which seems to argue on the back of recent weak CPI in Canada that we could continue to a bias for a weak CAD in much the same was as we see the Mexican Peso also hitting 1-month lows as it retraces a stellar Q1.

Looking at the options market, we can see that one-year risk reversals are showing a long-term premium being paid for USD/CAD calls to puts and the 1-yr 25D RR premium is increasing. USD/CAD support can be seen on the short-term at the weekly opening range low at 1.3410. Above there, it would likely serve traders better to anticipate buying a pullback than fighting the trend. Despite the CAD being at its cheapest level in 14-months against the USD, the pledge from PM Trudeau to defend Canadian interests could cause the market to sell the Loonie further.

Join Tyler at his Daily Closing Bell webinars at 3 pm ETto discuss key market developments.

USD/CAD Technical Analysis: A Case Study On Not Fighting Breakouts

Chart Created by Tyler Yell, CMT

USD/CAD Sentiment:

USD/CAD Technical Analysis: A Case Study On Not Fighting Breakouts

USDCAD: As of April 25, retail trader data shows 34.0% of traders are net-long with the ratio of traders short to long at 1.94 to 1. The number of traders net-long is 36.0% higher than yesterday and 13.3% lower from last week, while the number of traders net-short is 4.6% lower than yesterday and 76.4% higher from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests USDCAD prices may continue to rise. Positioning is less net-short than yesterday but more net-short from last week. The combination of current sentiment and recent changes gives us a further mixed USDCAD trading bias. (Emphasis Mine)

What do retail traders’ buy/sell decisions hint about the CAD trend? Find out here!

---

Shorter-Term USD/CAD Technical Levels: Tuesday, April 24, 2017

For those interested in shorter-term levels of focus than the ones above, these levels signal important potential pivot levels over the next 48-hours.

USD/CAD Technical Analysis: A Case Study On Not Fighting Breakouts

Contact and discuss markets with Tyler on Twitter: @ForexYell

To receive Tyler's analysis directly via email, please SIGN UP HERE

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

DISCLOSURES

News & Analysis at your fingertips.