In this series we scale-back and look at the broader technical picture to gain a bit more perspective on where we are in trend. The Canadian Dollar is up more-than 0.4% against the US Dollar this week with USD/CAD pullback back from confluence technical resistance. These are the updated targets and invalidation levels that matter on the USD/CAD weekly chart.

New to Forex Trading? Get started with this Free Beginners Guide

USD/CAD Weekly Price Chart

USD/CAD Price Chart - US Dollar vs Canadian Dollar Weekly

Notes: In last month’s USD/CAD Weekly Technical Outlook we noted that price was, “approaching a critical weekly support confluence at 1.3037/57 and we’re looking for a reaction in price on a drop into this zone early in the month. From a trading standpoint, a good area to reduce short-exposure / lower protective stops.” Price registered a low at 1.3068 before rebounding with the advance now trading below confluence resistance at 1.3435/37– a region defined by the 61.8% retracement of the December decline and the 2017 yearly open. A breach / close above this threshold is needed to fuel the next leg higher targeting 1.3647/86.

Weekly support now stands at the highlighted slope confluence around ~1.3140 with broader bullish invalidation steady at 38.2% retracement / 200-day moving average at 1.3052/70. Note that weakness beyond this level would also constitute a break of the yearly opening-range lows and would risk substantial losses in price with such a scenario targeting the October low-week reversal close at 1.2939.

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

Bottom line: We’re looking for a pivot off the 1.3435/37 confluence resistance zone with the immediate long-bias vulnerable while below. From a trading standpoint, a good place to reduce long exposure / raise protective stops and be on the lookout for possible price exhaustion. I’ll publish an updated USD/CAD Price Outlook once we get further clarity in near-term price action. Keep in mind the FOMC interest rate decision is on tap next week.

Even the most seasoned traders need a reminder every now and then- Avoid these Mistakes in your trading

USD/CAD Trader Sentiment

USD/CAD Trader Sentiment

  • A summary of IG Client Sentiment shows traders are net-long USD/CAD – the ratio stands at +1.03 (50.6% of traders are long) – neutral reading
  • The percentage of traders net-long is now its highest since March 4th
  • Long positions are 39.3% higher than yesterday and 60.1% higher from last week
  • Short positions are 14.3% lower than yesterday and 26.7% 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.

See how shifts in USD/CAD retail positioning are impacting trend- Learn more about sentiment!

Relevant USD/CAD Data Releases

USD/CAD Economic Calendar - US / Canada Data Releases

Economic Calendar – latest economic developments and upcoming event risk. Learn more about how we Trade the News in our Free Guide!

Previous Weekly Technical Charts

Learn how to Trade with Confidence in our Free Trading Guide

— Written by Michael Boutros, Technical Currency Strategist with DailyFX

Follow Michael on Twitter @MBForex

Source link

Technical Analysis, Stockmarkets Insights, Trading Tools: Biedex.com
Register New Account
Reset Password