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USD/CAD Technical Outlook: Testing Support, Near 200-day

USD/CAD Technical Outlook: Testing Support, Near 200-day

Paul Robinson, Strategist

USD/CAD Technical Outlook

  • USD/CAD reversal has the June trend-line in focus
  • 200-day moving average not far below current levels
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USD/CAD Technical Outlook: Testing Support, Near 200-day

USD/CAD was off to the races a week ago before the rally came to a very abrupt end at long-term resistance. The 12950 area was viewed as meaningful, but expected to be this meaningful. At any rate, here we are significantly lower and testing a familiar line of support.

The trend-line running up from June was validated right before USD/CAD took off, and as a result is viewed as a line worthy of our attention. Right now, price action is weak as it struggles to find buyers on support. This could change, but soon we may see a breach of support.

In the event we see a breakdown, in near confluence is the 200-day moving average currently situated at 12545. Given the close proximity of the trend-line and MA, we could see some reversal type price action unfold that gives buyers at least a shot at a bounce unfolding.

If buyers step in soon, it is hard to say whether strength will last – but should it last, then the general price action would still remain constructive for a continued rally off the June low. Should support break, then we will look to the July low at 12422 as the next meaningful level of support.

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USD/CAD Daily Chart

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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.

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