News & Analysis at your fingertips.

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. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View more
Breaking news

UK to Announce Vaccine Passports and WFH Guidance in Move to Plan B

Canadian Dollar Outlook: USD/CAD Plunges into April- Support Ahead

Canadian Dollar Outlook: USD/CAD Plunges into April- Support Ahead

Michael Boutros, Strategist

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

Canadian Dollar Price Chart - USD/CAD Daily - Loonie Trade Outlook - Technical Forecast

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

Canadian Dollar Price Chart - USD/CAD 120min - Loonie Trade Outlook - Technical Forecast

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

Canadian Dollar Trader Sentiment - USD/CAD Retail Positioning - Loonie Trade Outlook - Technical Forecast
  • 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.

---

Key US / Canada Data Releases

Key US / Canada Data Releases - USD/CAD Economic Calendar - Loonie Event Risk

Economic Calendar - latest economic developments and upcoming event risk.

Active Technical Setups

- Written by Michael Boutros, Currency Strategist with DailyFX

Follow Michael on Twitter @MBForex

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

DISCLOSURES