Canadian Dollar Technical Forecast: USD/CAD Breakdown at a Big Level

USD/CAD Technical Outlook

• USD/CAD trading near 2017 low at 12061
• Watching price action closely for cues
• Key levels and lines to watch

Canadian Dollar Technical Forecast: USD/CAD Breakdown at a Big Level

USD/CAD continues to trade very weak, unable to muster any type of rally since breaking down a few weeks ago. The 2018 low brought nothing in the way of support and now the 2017 low sits just a stone’s throw away.

The 12061 level is next up to see whether USD/CAD can find a low at a meaningful long-term level. At the moment it seems as if nothing can put a floor in, but that can change very quickly. We have seen USD/CAD run lower before with seemingly no floor in sight only to see price suddenly turn around. So we need to be on our toes.

A large one day reversal could do the trick to put in a low for now, but reacting instead of predicting is the key here from a tactical standpoint.

For those who may be holding shorts from higher levels, utilizing a trailing stop strategy of some type would be a prudent way to go to protect profits. But again, until we see some type of sudden turnabout or bottoming process unfold, sellers are still in charge.

With that said, however, fresh shorts don’t have much appeal from a risk/reward perspective without first seeing some type of corrective price behavior. Longs at this time hold no appeal. But should we see a reaction around significant support, then that outlook could quickly change for those looking at playing a countertrend move.

Should we see a bounce develop soon, keep an eye on the 2018 low as well as the June 2020 slope connecting numerous lows since then. If the 2017 folds then the next level of support clocks in at a meaningful swing-low that developed in 2015 at 11919.

USD/CAD Daily Chart (watch price action around the 2017 low)

USD/CAD Chart by TradingView

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---Written by Paul Robinson, Market Analyst

You can follow Paul on Twitter at @PaulRobinsonFX