USD/CAD Technical Overview: Chart Levels & Scenarios to Watch
USD/CAD Technical Outlook
- USD/CAD tried to snap trend, but failed
- BoC meeting kicked off a new wave lower
- 2017/18 lows are in focus once again
USD/CAD Technical Overview: Multi-year Lows Again in Focus
USD/CAD attempted to turn its March to current downtrend around when it snuck above a strong one-year trend-line and consolidated, but after last week’s BoC meeting the potentially positive outlook was sidelined. The sell-off caused price to break the range to the downside.
The focus for much of the time in recent months was on the 2017 and 2018 lows, with only a short while looking like those might be avoided. With the 2021 lows so close, the focus again shifts towards 12247 (2018 low) and 12061 (2017 low).
It hasn’t been a smooth ride lower, but the downtrend is hard to deny. This keeps the trading bias to the downside, with a preference towards short entries on countertrend rallies that fail versus trying to chase price lower.
Each new low during this cycle has been met by buyers that often resulted in sharp upward corrections. It is quite possible this is the case again on a drop to fresh lows, especially if the 2018 low at 12247 is met. There is likely to be confluence with a slope from June 2020.
As far as longs go, there is little edge at this immediate moment. However, as just noted, there is a tendency for sharp reversals to show up following new swing lows. Looking to that 2018 level might offer up another one of those opportunities for would-be longs.
USD/CAD Daily Chart (watching 2017/18 lows)
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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.