USD/CAD Breakout Stalls- Loonie Levels

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The Canadian Dollar is down greater than 0.55% towards the US Dollar with a breach of the month-to-month opening-range taking USD/CAD to ranges not seen since January. These are the up to date targets and invalidation ranges that matter on the USD/CAD charts heading into the shut of the week/month. Review my newest Strategy Webinar for an in-depth breakdown of this setup and extra.

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USD/CAD Daily Price Chart

USD/CAD Price Chart - US Dollar vs Canadian Dollar Daily - Loonie Technical Outlook

Technical Outlook: In final week’s USD/CAD analyst choose we famous to, “Look for help forward of the 1.3435/37 confluence zone IF worth is heading greater on this stretch with near-term topside aims on the May excessive at 1.3514 and 1.3537– a breach / shut there can be wanted to validate a breakout of the month-to-month vary.” Price briefly registered a low at 1.3430 early within the week earlier than rallying sharply with the advance failing on the 1.3537 confluence resistance zone yesterday (excessive registered at 1.3546) – notice that each day momentum halted exactly on the 60-threshold and highlights the chance to the near-term breakout.

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USD/CAD 120min Price Chart

Canadian Dollar Price Outlook: USD/CAD Breakout Stalls- Loonie Levels

Notes: A better take a look at worth motion reveals USD/CAD buying and selling inside the confines of a near-term ascending pitchfork formation extending off the month-to-month lows. Note that worth discovered resistance on the 75% line for the second time on this final stretch with the pullback now probing again beneath the median-line.

Initial help rests with the 5/22 trendline backed intently by the 38.2% retracement at 1.3474– weak spot past this threshold would danger a bigger setback in direction of the decrease 25% line and the 1.3435/37 help pivot- search for an even bigger response there if reached. Resistance regular at 1.3537 with a breach above the higher parallel / month-to-month excessive at ~1.3546 wanted to validate the breakout focusing on 1.3574 & 1.3599.

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Bottom line: USD/CAD has damaged above the month-to-month opening-range highs and IF this breakout is legit, losses needs to be restricted to the decrease parallel (presently ~1.3450s) for now. From a buying and selling standpoint, a superb place to scale back short-exposure – be looking out for potential near-term exhaustion down right here. Ultimately, a breach / shut above the median-line is required to maintain the long-bias viable. Keep in thoughts Canada GDP information is slated for Friday morning. Review my newest USD/CAD Weekly Price Outlook for a longer-term take a look at the technical image on the Loonie.

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USD/CAD Trader Sentiment

USD/CAD Trader Sentiment - US Dollar vs Canadian Dollar Price Chart - Loonie Positioning

  • A abstract of IG Client Sentiment reveals merchants are net-short USD/CAD- the ratio stands at -2.51 (28.5% of merchants are lengthy) – bullishstudying
  • Traders have remained net-short since May 22nd; worth has moved 0.2% greater since then
  • Long positions are19.1% greater than yesterday and 10.2% decrease from final week
  • Short positions are5.8% greater than yesterday and 60.8% greater from final week
  • We usually take a contrarian view to crowd sentiment, and the very fact merchants are net-short suggests USD/CAD costs could proceed to rise. Traders are much less net-short than yesterday however extra net-short from final week and the mixture of present positioning and up to date adjustments offers us an additional blended USD/CAD buying and selling bias from a sentiment standpoint.

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Relevant US / Canada Economic Data Releases

US / Canada Data Releases - USD/CAD Economic Calendar

Economic Calendarnewest financial developments and upcoming occasion danger. Learn extra about how we Trade the News in our Free Guide!

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– Written by Michael Boutros, Currency Strategist with DailyFX

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