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USD/CAD Price Outlook

USD/CAD_FXPIG
  • USD/CAD testing make-or-break support on heels of US Mexico Trade Deal- 1.2950 key
  • Check out our 3Q projections in our Free DailyFX USD Trading Forecasts
  • Join Michael for Live Weekly Strategy Webinars on Mondays at 12:30GMT

The Canadian Dollar has continued to trade within the confines of the initial August opening range with news that a working US-Mexico trade deal has been negotiated sending USD/CAD to the monthly lows today in New York trade. Here are the updated targets and invalidation levels that matter on the USD/CAD charts this week. Review this week’s Strategy Webinar for an in-depth breakdown of this setup and more.

Technical Outlook: USD/CAD is testing key confluence support today 1.2951/68 – a region defined by the monthly opening range low, the 100% extension of the decline off the yearly high, the 38.2% retracement of the 2018 range and 61.8% parallel of the ascending pitchfork extending off the yearly lows.

A daily close below this level is needed to fuel the next leg lower in price with such a scenario targeting 1.2880 backed by a key confluence at ~1.2840s where the lower parallel converges on the 200-day moving average and channel support. Daily resistance stands at the 1.31-handle with broader bearish invalidation at 1.3165.

A closer look at USD/CAD price action further highlights this support zone- the immediate decline is at risk while above this threshold but the broader focus remains lower while within this descending pitchfork formation. Look for initial resistance at the median-line backed by 1.3067 and 1.31.

Bottom line: This is a make-or-break levels for USD/CAD near-term. From a trading standpoint, a good spot to reduce short exposure / bring in protective stops. I’ll favor fading strength sub-1.31 with a break lower targeting more significant structural support towards the lower parallel.

  • A summary of IG Client Sentiment shows traders are net-short USD/CAD - the ratio stands at -1.04 (49.0% of traders are long) – extremely weak bullishreading
  • Long positions are2.3% higher than yesterday and 18.0% lower from last week
  • Short positions are 2.5% lower than yesterday and 13.5% lower from last week
  • We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests USD/CAD prices may continue to rise. However traders are less net-short than yesterday but more net-short from last week and the combination of current positioning and recent changes gives us a further mixed USD/CAD trading bias from a sentiment standpoint.

Source:DailyFx.com

  • USD/CAD testing make-or-break support on heels of US Mexico Trade Deal- 1.2950 key
  • Check out our 3Q projections in our Free DailyFX USD Trading Forecasts
  • Join Michael for Live Weekly Strategy Webinars on Mondays at 12:30GMT

The Canadian Dollar has continued to trade within the confines of the initial August opening range with news that a working US-Mexico trade deal has been negotiated sending USD/CAD to the monthly lows today in New York trade. Here are the updated targets and invalidation levels that matter on the USD/CAD charts this week. Review this week’s Strategy Webinar for an in-depth breakdown of this setup and more.

Technical Outlook: USD/CAD is testing key confluence support today 1.2951/68 – a region defined by the monthly opening range low, the 100% extension of the decline off the yearly high, the 38.2% retracement of the 2018 range and 61.8% parallel of the ascending pitchfork extending off the yearly lows.

A daily close below this level is needed to fuel the next leg lower in price with such a scenario targeting 1.2880 backed by a key confluence at ~1.2840s where the lower parallel converges on the 200-day moving average and channel support. Daily resistance stands at the 1.31-handle with broader bearish invalidation at 1.3165.

A closer look at USD/CAD price action further highlights this support zone- the immediate decline is at risk while above this threshold but the broader focus remains lower while within this descending pitchfork formation. Look for initial resistance at the median-line backed by 1.3067 and 1.31.

Bottom line: This is a make-or-break levels for USD/CAD near-term. From a trading standpoint, a good spot to reduce short exposure / bring in protective stops. I’ll favor fading strength sub-1.31 with a break lower targeting more significant structural support towards the lower parallel.

  • A summary of IG Client Sentiment shows traders are net-short USD/CAD - the ratio stands at -1.04 (49.0% of traders are long) – extremely weak bullishreading
  • Long positions are2.3% higher than yesterday and 18.0% lower from last week
  • Short positions are 2.5% lower than yesterday and 13.5% lower from last week
  • We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests USD/CAD prices may continue to rise. However traders are less net-short than yesterday but more net-short from last week and the combination of current positioning and recent changes gives us a further mixed USD/CAD trading bias from a sentiment standpoint.

Source:DailyFx.com

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