USD/CAD Technical Overview: At Risk of a New Cycle Low Soon
USD/CAD Technical Outlook
- USD/CAD turn off trend-line keeps trend intact
- New cycle low below 12588 could be near
- Lows from 2018 and 2017 to watch
USD/CAD new cycle low may be near
Not long ago USD/CAD had a moment of life when it broke out of a month-long falling wedge formation; the results of the breakout were short-lived with the March trend-line quickly putting a lid on the advance.
The kiss of the trend-line was precise, with price never even trying to make a serious threat of breaching it. Several days of lower highs along the line have led to the current short-term leg down. A leg that could lead to a breakdown soon below 12588.
The low from last month could set into motion further momentum in what could soon become a year-long downtrend. The next level of support to watch is a pivot from 2018 at 12527 along with an underside trend-line from June, but neither threshold may lead to anything meaningful in terms of a low.
Instead, the big levels to watch are the 2018 and 2017 lows. The first doesn’t arrive until 12247, while the second not until 12061. The way things have been trading it seems like a long distance from here, but if a breakdown to a new low picks up momentum it might not take that long to reach.
To flip the bias bullish, the March trend-line will need to first be crossed. A higher high in the process would be another part of the turnaround needed to further reinforce confidence; this would take shape above 12881.
At this time, sticking with a bearish trading bias until warranted to do otherwise.
USD/CAD Daily Chart (remains in clear downtrend)
USD/CAD Weekly Chart (2018/17 lows to watch)
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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.