Canadian Dollar Weekly Price Outlook: Loonie At Turn Or Burn Pivot

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 has been fallen more than 8.4% against the US Dollar year-to-date with USD/CAD attempting to rally for the sixth consecutive week. In fact, the price has seen just one down-week since the October 1st low and the immediate focus is on a critical resistance pivot just higher. Here are the key targets & invalidation levels that matter on the USD/CAD weekly chart heading into the close of the year.

USD/CAD WEEKLY PRICE CHART

(Click on image to enlarge)

USD/CAD Weekly Price Chart

Notes: In our last USD/CAD Weekly Technical Outlook we highlighted that price was approaching, “a key resistance zone at 1.3375-1.3435- a region defined by the 50% retracement of the 2016 decline, the June swing highs and the 2017 yearly open. A breach / weekly close above this threshold is needed to keep the immediate long-bias viable.”

A breakout on December 18th fueled the advance with price accelerating towards the next major confluence resistance zone at the 61.8% retracement of the 2016 decline / 2017 high-week close at 1.3647/86. Note that weekly RSI has just broken into overbought territory and keeps the bulls in control for now- a topside breach from here targets subsequent resistance objectives at the 2017 highs at 1.3793 and 2012 slope parallel, currently at ~1.39. Interim support rests at 1.3375 with broader bullish invalidation down at highlighted confluence zone at ~1.3030.

Bottom line: USD/CAD is testing BIG resistance upper here and a breach/close is needed to keep the broader long-bias in play. From a trading standpoint, the immediate advance may be vulnerable below this threshold- a good place to reduce long exposure / raise protective stops. For now, keep an eye out for possible topside exhaustion while below this critical zone.

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