USD/CAD Daily
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Technical Outlook: Earlier this month we noted the break of key yearly open support at 1.3435, shifting the focus lower in the USD/CAD. The pair turned just ahead of a critical support barrier at 1.3141/45 with the subsequent recovery now testing near-term slope resistance. The broader outlook remains weighted to the down side while below the 200-day moving average, which converges on a pair of trendlines around 1.3330/34.
USD/CAD 240min
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Notes: A closer look at price action sees the pair trading within the confines of a descending pitchfork formation and further highlights near-term resistance targets at 1.3284 & 1.3330/34 – both areas of interest for exhaustion / short-entries. A break below key support at 1.3141/45 is needed to mark resumption of the broader downtrend with such a scenario targeting 1.3063 & the lower parallel.
Added caution is warranted heading into Canada Retail Sales & CPI data later this week with the releases likely to fuel increased volatility in the Loonie crosses. Oil inventories tomorrow could also impact prices here, especially as crude probes into fresh yearly lows. If crude prices continue to break down, look for a breach above 1.3387 in USD/CAD to shift the outlook back to the long-side.
- A summary of IG Client Sentimentshows traders are net-long USD/CAD- the ratio stands at +2.22 (68.9% of traders are long)- bearish reading
- Traders have been net-long since June 7th; price has moved 1.3% lower since then
- Long positions are unchanged from yesterday but a full 33.3% higher from last week
- Short positions are 5.4% lower than yesterday and 16.5% lower from last week
- Traders are further net-long than yesterday and last week with the combination of current sentiment and recent changes offering a strong USD/CAD bearish trading bias.
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Relevant Data Releases
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