Canadian Dollar Technical Price Outlook: Near-term Trade Levels
- Canadian Dollar updated technical trade levels – Daily & Intraday Charts
- USD/CAD carving monthly opening range just below key technical pivot zone
- Bears vulnerable while above 1.2473 – resistance at 1.2579, bearish invalidation 1.2713
The Canadian Dollar is ripping into the weekly open with USD/CAD plummeting more than 0.4% in early New York trade. The decline is now targeting a key technical pivot zone just lower and we’re looking for a reaction this week for guidance with the bears vulnerable into near-term uptrend support just. These are the updated targets and invalidation levels that matter on the USD/CAD price charts. Review my latest Strategy Webinar for an in-depth breakdown of this Loonie technical setup and more.
Canadian Dollar Price Chart – USD/CAD Daily
Chart Prepared by Michael Boutros, Technical Strategist; USD/CAD on Tradingview
Technical Outlook: The Canadian Dollar is carving the April opening-range just below a key pivot zone we’ve been tracking for months now at 1.2579-1.2606. Price is poised to mark an outside-day reversal into the lows with USD/CAD riding former resistance at the March trendline as support. Key daily support rests with the lower parallel / 2021 low-day close at 1.2485 – a break / close below this threshold would be needed to mark resumption of the broader downtrend with such a scenario exposing the yearly close-low at 1.2400 and the 2018 low-day close at 1.2312.
Canadian Dollar Price Chart – USD/CAD 120min
Notes: A closer look at Loonie price action shows USD/CAD continuing to trade within the confines of an ascending pitchfork formation extending off the yearly lows. An embedded descending channel has price testing support here with a critical confluence zone seen just lower at 1.2473/85- a region defined by the 61.8% Fibonacci retracement of the March advance, the 100% extension of the most recent decline and the low-day close. Note that the lower parallel (uptrend support) converges on this threshold over the next few days and further highlights its technical significance. Resistance steady at 1.2579-1.2606 – a breach / close above would shift the focus towards 1.2647 and 1.2684.Ultimately, a breach / close above the objective 2021 yearly open at 1.2713 would be needed to suggest a more significant low was registered last month.
Bottom line: USD/CAD has reversed off a key technical pivot zone – which now marks the objective April opening-range highs. From a trading standpoint, look to reduce short-exposure / lower protective stops on a test of 1.2473/84 – an area of interest for possible downside exhaustion IF reached. Ultimately a larger setback here may offer more favorable opportunities closer to trend support with a breach above the 1.26-handle needed to shift the focus back to the long-side again. Respect a break below this formation with such a scenario likely to fuel another accelerated bout of selling in the greenback. Review my latest Canadian Dollar Weekly Price Outlook for a closer look at the longer-term USD/CAD technical trade levels.
For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy
Canadian Dollar Trader Sentiment – USD/CAD Price Chart
- A summary of IG Client Sentiment shows traders are net-long USD/CAD - the ratio stands at +1.24 (55.39% of traders are long) – weak bearish reading
- Long positions are0.15% higher than yesterday and 4.10% lower from last week
- Short positions are 3.41% higher than yesterday and 13.99% higher from last week
- We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests USD/CAD prices may continue to fall. Yet traders are less net-long than yesterday and compared with last week. Recent changes in sentiment warn that the current USD/CAD price trend may soon reverse higher despite the fact traders remain net-long.
| Change in | Longs | Shorts | OI |
| Daily | -2% | 7% | 5% |
| Weekly | -30% | 38% | 13% |
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Key US / Canada Data Releases
Economic Calendar - latest economic developments and upcoming event risk.
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- Written by Michael Boutros, Currency Strategist with DailyFX
Follow Michael on Twitter @MBForex
