(MENAFN- DailyFX) Updated weekly technicals on USD/CAD- price recovery approaching critical resistance Check out our 4Q projections in our Join Michael for Live Weekly Strategy Webinars on In this series we scale-back and take a look at the broader technical picture to gain a bit more perspective on where we are in trend. The has been under considerable pressure for the past three weeks (USD/CAD higher more-than 2% month-to-date) with price now testing a critical resistance confluence ahead of the Bank of Canada rate decision on Wednesday. Here are the key targets & invalidation levels that matter on the USD/CAD weekly chart. for an in-depth breakdown of this setup and more.
New to Forex Trading? Get started with this
USD/CAD Weekly Price Chart Notes: USD/CAD broke above 2016 resistance back in June with price rebounding off this same slope into the start of October trade. Initially, the move looked like a we were wrong! The subsequent recovery fueled a three-week rally with USD/CAD now approaching a critical resistance barrier at 1.3130/55- a region defined by the yearly high-week reversal close, the 61.8% retracement of the June decline and parallel resistance (red). Note that weekly RSI is also testing a resistance trigger extending off the yearly highs in momentum.
A breach / close above this threshold is needed to keep the long-bias viable with such a scenario targeting the 50% of the 2016 decline at 1.3376 backed by 1.3647/86. Initial support rest with the monthly low-week close / 200-week moving average at ~1.2939/70 backed by the 52-week at ~1.2860s and a more significant confluence at the 100% extension at 1.2728.
For a complete breakdown of Michael's trading strategy, review his
Bottom line:USD/CAD is testing Big resistance here at 1.3130/55 with the immediate long-bias at risk while below. Keep in mind the Bank of Canada interest rate decision is on tap this week with markets already pricing in a 25basis point hike to 1.75%. From a trading standpoint, a good spot wind down long-exposure and raise stops. I'll be looking for a reaction at this key resistance barrier, initially for a possible / fade opportunity- watch the weekly close here for guidance.
Even the most seasoned traders need a reminder every now and then-
USD/CAD Trader Sentiment A summary of shows traders are net-short USD/CAD - the ratio stands at -1.66 (37.6% of traders are long) bullish reading Traders have remained net-short since October 9th; price has moved 1.1% higher since then Long positions are15.1% higher than yesterday and 5.4% higher from last week Short positions are 9.2% higher than yesterday and 19.9% higher from last week We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests USD / CAD prices may continue to rise. Yet traders are less net-short than yesterday but more net-short from last week andthe combination of current positioning and recent changes gives us a further mixed USD/CAD trading bias from a sentiment standpoint. See how shifts in USD/CAD retail positioning are impacting trend-
Relevant USD/CAD Economic Data Releases for the latest economic developments and upcoming event risk. Learn more about how we
Previous Weekly Technical Perspectives
--- Written by , Technical Currency Strategist with DailyFX
Follow Michael on Twitter or contact him at
MENAFN2210201800760000ID1097604433
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.