USD/CAD Technical Outlook: Trying to Bottom at Long-term Support
- Long-term support from 2009 been helping keep a floor in
- Channel line from 2017 in confluence with 11-year support line
USD/CAD has been testing a big area of support that dates back to the Great Financial Crisis, with the level not that obvious at times given it runs through a lot of price action over the years. But nevertheless the 13000 line has been big, with it acting as support now three times going back to last year.
There is a trend-line (lower parallel tied to a top-side trend-line extending over the 2017/20 highs) that is also in confluence with the 13000 level. This makes for a good floor that if maintained at the very least keeps the outlook neutral, but if broken could lead to a sizable leg lower as strong support isn’t to be found for some distance below.
It is possible that USD/CAD is trying to carve a higher-low from the September 1 low, but some more work is needed to turn the near-term favorable for taking long-side bets. With a little more strength above 13259 and a demonstration that price wants to hold, then we could look to the September high at 13418 as the next level of resistance. This would indeed be a big test.
Should price sag some more then shorts will remain in control, but with the 13000 level so close by it doesn’t make for the most appealing risk/reward set-up to be an aggressive seller. A break through the September low, though, would be reason to dial it up in looking for a stronger move to the downside.
USD/CAD Weekly Chart (Major level of support around 13000)
USD/CAD Daily Chart (in state of limbo at the moment)
Resources for Forex Traders
Whether you are a new or experienced trader, we have several resources available to help you; indicator for tracking trader sentiment, quarterly trading forecasts, analytical and educational webinars held daily, trading guides to help you improve trading performance, and one specifically for those who are new to forex.
---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.