Skip to content
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
Canadian Dollar Outlook: USD/CAD Coils at Key Support- Breakout Levels

Canadian Dollar Outlook: USD/CAD Coils at Key Support- Breakout Levels

Michael Boutros, Strategist

Canadian Dollar Technical Price Outlook: Near-term Trade Levels

  • Canadian Dollar updated technical trade levels – Daily & Intraday Charts
  • USD/CAD breakdown stalls into technical support- weekly opening-range in focus
  • Key near-term support 1.2422/40 - Resistance 1.2525, 1.2589 (key)
Advertisement

The Canadian Dollar surged nearly 2% against the US Dollar since the start of the month with a three-week decline in USD/CAD taking price into a major support hurdle. We’re on the lookout for possible downside exhaustion into this threshold as Loonie sets a well-defined weekly range setup just above. These are the updated targets and invalidation levels that matter on the USD/CAD price charts heading into key US Inflation data tomorrow. Review my latest Strategy Webinar for an in-depth breakdown of this Loonie technical setup and more.

Starts in:
Live now:
Oct 03
( 12:10 GMT )
Live Weekly Strategy Webinars on Mondays at 12:30GMT
Weekly Scalping Webinar
Register for webinar
Join now
Webinar has ended

Canadian Dollar Price Chart – USD/CAD Daily

Canadian Dollar Price Chart - USD/CAD Daily - Loonie Trade Outlook - Technical Forecast

Chart Prepared by Michael Boutros, Technical Strategist; USD/CAD on Tradingview

Technical Outlook: In my last Canadian Dollar Price Outlook we noted that USD/CAD was trading, “within the confines of a broad multi-month price consolidation and we’ll be looking for the breakout to offer guidance as we head into October trade.” A downside break of the lower bounds on October 7th fueled a decline of more than 1.2% with the sell-off settling just above confluence support at the late-July lows / 100% extension of the August decline at 1.2422/40 – looking for possible price inflection off this threshold in the days ahead.

Canadian Dollar Price Chart – USD/CAD 120min

Canadian Dollar Price Chart - USD/CAD 120min - Loonie Trade Outlook - Technical Forecast

Notes: A closer look at Loonie price action shows USD/CAD trading within the confines of a descending channel formation with the lower parallel further highlighting near-term support at 1.2422/40. Initial resistance eyed at the September low-day close at 1.2525 with bearish invalidation now lowered to the upper parallel / 38.2% Fibonacci retracement at 1.2589 – a breach / close above this threshold is needed to suggest a more significant near-term low is in place. A break lower from here would threaten another bout of losses towards subsequent support objectives at the March low / 61.8% retracement at 1.2365/66 and the July lows at 1.2302.

Forex for Beginners
Forex for Beginners
Recommended by Michael Boutros
New to Forex Trading? Get started with this Beginners Guide
Get My Guide

Bottom line: USD/CAD has set the weekly opening-rang just above key near-term support – look to the breakout for guidance with the bears vulnerable while above. From a trading standpoint, a good zone to reduce short-exposure / lower protective stops - look for a reaction into the upper parallel IF reached with a close above 1.2589 needed to shift the focus back toward the yearly open at 1.2713. A pivot below this support zone would threaten resumption of the broader downtrend towards fresh three-month lows. Review my latest Canadian Dollar Weekly Price Outlook for a closer look at the longer-term USD/CAD technical trade levels.

For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy

Canadian Dollar Trader Sentiment – USD/CAD Price Chart

Canadian Dollar Trader Sentiment - USD/CAD Price Chart - Loonie Retail Positioning - Technical Outlook
  • A summary of IG Client Sentiment shows traders are net-long USD/CAD - the ratio stands at +3.16 (75.94% of traders are long) – typically bearish reading
  • Long positions are5.20% higher than yesterday and 16.63% higher from last week
  • Short positions are 6.34% lower than yesterday and 20.75% lower from last week
  • We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests USD/CAD prices may continue to fall. Traders are further net-long than yesterday and last week, and the combination of current positioning and recent changes gives us a stronger USD/CAD-bearish contrarian trading bias from a sentiment standpoint.
USD/CAD Mixed
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily 9% -4% -1%
Weekly -19% -5% -10%
Learn how shifts in USD/CAD retail positioning impact trend
Get My Guide

---

Key US / Canada Data Releases

Key US / Canada Data Releases - USD/CAD Economic Calendar - Loonie Event Risk

Economic Calendar - latest economic developments and upcoming event risk.

Active Technical Setups

- Written by Michael Boutros, Currency Strategist with DailyFX

Follow Michael on Twitter @MBForex

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES