Canadian Dollar Technical Price Outlook: Near-term Trade Levels
- Canadian Dollar updated technical trade levels – Daily & Intraday Charts
- USD/CAD presses deeper into key technical support zone- risk remains for near-term inflection
- Resistance 1.2546, 1.2640/49 (key) - Support 1.2432/70 (key), 1.2362/72, 1.2288
The Canadian Dollar rallied more than 0.50% against the US Dollar since the start of the week with USD/CAD continuing to press a key technical support pivot. Once again we’re on inflection watch with the bears vulnerable into this zone. These are the updated targets and invalidation levels that matter on the USD/CAD price charts. Review my latest Strategy Webinar for an in-depth breakdown of this Loonie technical setup and more.
Canadian Dollar Price Chart – USD/CAD Daily
Chart Prepared by Michael Boutros, Technical Strategist; USD/CAD on Tradingview
Technical Outlook: In last week Canadian Dollar Price Outlook we noted that the a break of the, “monthly open / opening-range lows taking price towards a key support zone at the 78.6% Fibonacci retracement of the October rally / 100% extension of the December decline at 1.2432/70.” This threshold has continued to limit the downside and the focus remains on possible inflection in the days ahead. It’s make-or-break here.
Canadian Dollar Price Chart – USD/CAD 240min
Notes: A closer look at Loonie price action shows USD/CAD continuing trading within the confines of the near-term descending pitchfork off the December. Some fine-tuning on the slope sees the median-line converging on the 1.2432/70 support threshold and further highlights the technical significance of this pivot zone. Weekly open resistance at 1.2530/46 with near-term bearish invalidation steady at the yearly open / 38.2% retracement of the December decline at 1.2640/49. Note that a break lower from here could fuel another accelerated bout of selling with such a scenario exposing subsequent support objectives at the October low-day close / 61.8% retracement of the June advance at 1.2362/72,the October low 1.2288 and the 2018 low at 1.2247.
Bottom line: The focus remains on this pivot-zone with the broader decline vulnerable while above 1.2432. Form a trading standpoint, be on the lookout for an exhaustion low with a breach above the weekly range highs needed to fuel a larger recovery. Stay nimble here- things could fall apart very quickly IF this breaks. 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
- A summary of IG Client Sentiment shows traders are net-long USD/CAD - the ratio stands at +2.74 (73.29% of traders are long) – typically bearish reading
- Long positions are0.85% higher than yesterday and 8.63% higher from last week
- Short positions are 13.16% higher than yesterday and 9.23% 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 less net-long than yesterday but more net-long from last week. The combination of current positioning and recent changes gives us a further mixed USD/CAD trading bias from a sentiment standpoint.
| Change in | Longs | Shorts | OI |
| Daily | 4% | -6% | 0% |
| Weekly | 84% | -45% | 6% |
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- Written by Michael Boutros, Currency Strategist with DailyFX
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