USD/CAD Technical Outlook: May Bounce but Continue Trend After
- USD/CAD trend is clearly lower after long-term support breaks
- May bounce, test the breakdown level then turn back lower
- Will take a good deal of work to turn the outlook bullish
USD/CAD has been one of the more persistent trends in FX, with it running lower the past month nearly uninterrupted. Only pauses have marked the recent slide. We may see a reprieve for those with a bullish outlook, but at this time it looks like that will only be a temporary event.
The week ending December 4 brought with it a strong weekly closing candle below support from 2009 and the trend-line/channel-line from 2017. This put USD/CAD in position to continue lower and remain in position to trade as low as the 2017 low at 12061 in this run.
But that will likely take some time and before even continuing lower from here there may be a bounce that sees the area right around 13000 tested before selling commences again. Perhaps that is a bit ambitious given the one-way path USD/CAD has been on, but as long as it stays below 13000 the outlook is neutral at best.
Looking lower, the next level of price support arrives around 12500, then 12249, and finally the big level down at 12061. Heading into 2021 this may be a trend that continues to be one of the stronger, or at least most persistent in developed market currencies.
USD/CAD Weekly Chart (big support broken, watch 2018 levels on more selling)
USD/CAD Daily Chart (bounce may develop)
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---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.