USD/CAD Technical Outlook: Looking to Continue Trading Lower
USD/CAD Technical Outlook
- USD/CAD finding little support by buyers
- Breaking trend-line support near 200-day MA
USD/CAD Technical Outlook: Looking to Trade Lower Still
USD/CAD rose sharply in August and fell just as hard, posting a monthly reversal for the second month in a row. Bigger picture this hints at a sell-off coming, but even if the broader picture doesn’t play out as it looks, the short-term doesn’t look too strong either.
The recent decline from the 12950 level has found very minimal sponsorship by buyers even with a trend-line nearby as support. The one-day bounce last week has been followed by weak price action that suggests we will soon see further weakness.
On the 4-hr chart a descending wedge is taking shape that if broken will have the 200-day at 12536 (and declining) in play. If that goes then it should lead to the lowest levels since July 30. The low then was 12422. It may act as a meaningful floor, then again it may not – we will evaluate price action should it get tagged.
To turn the picture bullish there is some work to be done. A turn higher from here and above last week’s high at 12708 will be needed to start. Depending on how that unfolded it may become clearer a rally could develop, or maybe not. At the least it would be a warning for sellers to take caution.
For now, a confirmed breakdown below 12569 (4-hr closing candle below) will have the wedge broken and the 200-day up next to watch for signs of further momentum pushing it through.
USD/CAD Daily Chart
USD/CAD 4-hr 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.