USD/CAD Threatens January Uptrend – NFP Levels
Canadian Dollar Technical Price Outlook: Short-Term Trading Levels
- Canadian dollar Updated Technical Trading Levels – Daily and Intraday Charts
- USD/CAD Returns to Yearly Open Resistance – BoC/FOMC at Your Fingertips
- Resistance 1.2724 (key), 1.2767, 1.2813 – Support 1.2664, 1.2640 & 1.2582 (key)
the American dollars has fallen more than 0.75% against the Canadian dollar since the start of the week, with USD/CAD now testing January’s uptrend ahead of key employment data in the US and Canada on Friday. It’s the updated targets and invalidation levels that count on the USD/BODY price grids. Review my last Strategy Webinar for an in-depth analysis of this technical Loonie setup and more.
Canadian Dollar Price Chart – Daily USD/CAD
Chart prepared by Michel Boutrostechnical strategist; USD/CAD on Tradingview
Technical outlook: In Last week Canadian Dollar Price Outlook we noted that the USD/CAD “recovery extended into the December trendline before pulling back with the immediate focus now on confluent resistance at the yearly open objective/38.2% retracement of the decline from December to 1.2640/46– we are looking for a short-term inflection out of this area with a daily close above needed to validate the breakout. The price spent three days testing this resistance zone before breaking out, with the rally briefly extending beyond the 61.8%Fibonacci retracement of the decline from December to 1.2767 before stepping back. Attention now turns to Support As USD/CAD tests the slope of the larger uptrend, we look for an exhaustion bottom in the days ahead.
Canadian dollar rate chart – USD/CAD 120min
Remarks: A closer look at the Loonie’s price action shows USD/CAD continued trading within the confines of an ascending January low with an embedded descending channel defining the recent pullback from the uptrend rresistance. Initial support now sits at the sliding parallel/38.2% retracement of the January rally at 1.2664 with the objective of an annual opening just under 1.2640– a break below this threshold could risk a more significant correction with bullish invalidation now taken to the 61.8% retracement at 1.2582. Initial resistance is now holding with the yearly close of the day high at 1.2724 with a gap / close above 1.2767 needed to mark the resumption of January’s advance targeting yearly highs at 1.2813 and beyond.
At the end of the line : The pullback in USD/CAD is testing short-term uptrend support here – for now, we are watching for a possible exhaustion bottom. From a trading standpoint, a good area to reduce short-term exposure / lower protective stop-losses should be limited to the yearly open price IF heading higher with a breakout of this short-term channel necessary to move the attention upwards again. Keep in mind that we have the release of US Nonfarm Payrolls (NFP) and Canadian Employment data on Friday – stay nimble here. Review my latest Canadian Dollar Weekly Price Outlook for a closer look at the longer term technical trading levels of USD/CAD.
For a full analysis of Michael’s trading strategy, see his Fundamentals of Technical Analysis Series on Bbuild a Jrading Sstrategy
Canadian Dollar Traders Sentiment – USD/CAD Price Chart
- A summary of IG Customer Sentiment shows traders are net long USD/CAD – ratio stands at +1.43 (58.88% of traders are long) – generally a low bearish reading
- Long positions are8.24% more than yesterday and 5.92% less than last week
- Short positions are 13.03% more than yesterday and 19.25% more than last week
- We generally take a contrarian view of crowd sentiment, and the fact that traders are net buyers suggests that USD/CAD prices may continue lower. Still, traders are net less long than yesterday and compared to last week. Recent changes in feeling warn that the current USD/CAD price trend may soon reverse higher despite traders staying sharp.
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– Written by Michel BoutrosCurrency Strategist at DailyFX
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