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
Real Time News
  • Implementing a trading checklist is a vital part of the trading process because it helps traders to stay disciplined, stick to the trading plan, and builds confidence. Learn how to stick to the plan, stay disciplined, and use a checklist here: https://t.co/SQUCCZ9dzS https://t.co/I8jJq8NGCH
  • We are heading into a Tuesday lull which precedes Wednesday's FOMC focus. Will the absence of distractions allow for risk trends to gain momentum or perhaps will Fed anticipation temper the $SPX tumble? My take: https://www.dailyfx.com/forex/video/daily_news_report/2021/09/21/Fed-Taper-Focus-May-Help-Stall-the-SP-500s-Collapse-Dollars-Charge.html https://t.co/T4m60xEfk6
  • CTV projects Trudeau wins his third term as Canada's Prime Minister - BBG
  • Do you know how to properly Identify a double top formation? Double tops can enhance technical analysis when trading both forex or stocks, making the pattern highly versatile in nature. Learn more about the double top formation here: https://t.co/t9FlspUVZz https://t.co/KY6MiOC9Y6
  • US House Speaker Pelosi says top-line spending number may change but hopes for $3.5 trillion in spending bill - BBG
  • RBA Minutes: - Board committed to providing high level of monetary support - Q3 GDP expected to decline materially - Central scenario is rates on hold until 2024 - BBG $AUDUSD
  • Heads Up:🇦🇺 RBA Meeting Minutes due at 01:30 GMT (15min) https://www.dailyfx.com/economic-calendar#2021-09-21
  • New Zealand reports 14 new local Covid cases - BBG
  • I had a chance to talk with @tastytradeRyan and @victorJ0NES about Evergrande and its impact on US markets — always great talking with these two guys on Mondays. https://t.co/vddTknnPWC
  • RT @cheddar: Stocks dropped the most since May on Monday, sending shockwaves through Wall Street. @CVecchioFX explains the global impact of…
USD/CAD Technical Outlook: Short-term Chart in Focus

USD/CAD Technical Outlook: Short-term Chart in Focus

Paul Robinson, Strategist

USD/CAD Technical Outlook

  • USD/CAD bounced off support, but looks only corrective in nature
  • Short-term charts suggest we will soon see price turn down
  • A break of month-long support is seen as likely

USD/CAD Technical Outlook: Short-term Chart in Focus

USD/CAD has bounced the past couple of days, but renewed weakness is expected to set in again here shortly. The reversal from around the middle of July has set off an orderly trend that is now showing classic corrective price behavior on the 1 to 4hr time-frames.

The hourly shows it most clearly, with a corrective wedge forming. These patterns consist of a narrowing range and overlapping price action, which is indicative of a market that is unable to reverse the most recent decline.

Not only is the pattern nearing completion, but price is very near resistance that formed during the last run of horizontal price action. The area around 12525 is seen as likely to keep a lid on any further strength from here.

To confirm the corrective pattern there needs to be a breaking of the lower trend-line of the pattern. These formations aren’t perfect of course, so waiting for confirmation is key. USD/CAD could still attract buying interest and break higher above resistance.

Should the pattern trigger, looking for price to decline below 12422, which would also be a breach of an area of support that has been growing with importance over the past month. The 12450/12422-area first acted as resistance at the start of July, but has since turned into a meaningful level of support.

A break below support would then have the next region of support in focus from just over 12300 down to 12252. There is a slope from December to watch prior to those levels, but given it is running with the direction of the trend it isn’t viewed as the most meaningful level.

On the flip-side, should we see the wedge fail to confirm and price rise strongly above 12525, then the outlook neutralizes a bit. But it will still take some work to turn the picture bullish. At this juncture it would take a strong push higher and holding of strength to start building a generally bullish bias.

Advertisement

USD/CAD Daily Chart

usd/cad daily chart

USD/CAD Hourly Chart

usd/cad hourly chart

USD/CAD Charts by TradingView

Resources for Forex Traders

Whether you are a new or experienced trader, we have several resources available to help you; indicator for tracking trader sentiment, quarterly trading forecasts, analytical and educational webinars held daily, trading guides to help you improve trading performance, and one specifically for those who are new to forex.

---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.

DISCLOSURES