Tuesday, 17 September 2019 04:14 GMT

Canadian Dollar Outlook: USD/CAD Reversal Rally from Range Support

(MENAFN - DailyFX) USD/CAD Talking Points: USD/CADhas been range-bound for a month now, with price action building into a box between resistance at 1.3500 and support coming from a few key confluent Fibonacci levels.Are breakouts nearing in USD/CAD?Yesterday saw a fast and buyers have continued to push ever since, exposing the resistance side of the recent range. DailyFX Forecasts are published on a variety of currencies such as theCanadian Dollar and are available from theDailyFX Trading Guides page . If you're looking to improve your trading approach, check outTraits of Successful Traders . And if you're looking for an introductory primer to the Forex market, check out ourNew to FX Guide . Do you want to see how retail traders are currently trading USD/CAD? Check out ourIG Client Sentiment Indicator .

USD/CAD Reversal Rally Inside of Month-long Range TheCanadian Dollarstarted the year with a strong rush of strength as USD/CAD fell by more than 500 pips in the month of January. Since then, however, it's largely been continued weakness in the Canadian Dollar as USD/CAD has pushed back up to the 1.3500 handle. To be sure, there have been instances of congestion along-the-way. From early-March into late-April, the pair put in both lower-highs and higher-lows and then from late-April into currentprice action , a horizontal range has built-in between two key areas on the chart. At resistance, the 1.3500 psychological level has helped to temper the highs over the past month while support has been furnished from a confluent batch ofFibonacci levelsrunning from 1.3361-1.3385.

USD/CAD Eight-Hour Price Chartusd/cad usdcad eight hour price chartChart prepared byJames Stanley

I had looked into the range in USD/CAD in Tuesday's webinar.Since then, price action has traversed almost the entirety of that formation as yesterday's test below 1.3361 was aggressively reversed by buyers that have now pushed prices-higher more than 100 pips higher.Price action in the pair is now fast approaching the 1.3500 handle , which has been a key component of resistance for the build of this month-old range.

This could, at the very least, make near-term strategy rather clear: For those that are comfortable looking at USD-weakness scenarios, short-side setups off of range resistance can be attractive, looking for a revisit of range support sub-1.3400. For those looking to retain a bullish USD-bias, awaiting a topside break of that range resistance can re-open the door for bullish breakout scenarios or, alternatively, a revisit to range support. And while directional prognostications and predicting breakouts can be a perilous sport, at the very least, the risk management of the situation is fairly clear.

USD/CAD Two-Hour Price Chartusd/cad usdcad two hour price chartChart prepared byJames Stanley

To read more: Are you looking for longer-term analysis on the U.S. Dollar? OurDailyFX Forecasts have a section for each major currency, and we also offer a plethora of resourcesUSD -pairs such asEUR/USD ,GBP/USD ,USD/JPY ,USD/CAD . Traders can also stay up with near-term positioning via ourIG Client Sentiment Indicator .

Forex Trading Resources

DailyFX offers an abundance of tools, indicators and resources to help traders. For those looking for trading ideas, ourIG Client Sentimentshows the positioning of retail traders with actual live trades and positions. Ourtrading guidesbring our DailyFX Quarterly Forecasts and our Top Trading Opportunities; and ourreal-time news feedhas intra-day interactions from the DailyFX team. And if you're looking for real-time analysis, ourDailyFX Webinarsoffer numerous sessions each week in which you can see how and why we're looking at what we're looking at.

If you're looking for educational information, ourNew to FX guideis there to help new(er) traders while ourTraits of Successful Traders researchis built to help sharpen the skill set by focusing on risk and trade management.

--- Written by James Stanley, Strategist for DailyFX.com

Contact and follow James on Twitter:@JStanleyFX



Canadian Dollar Outlook: USD/CAD Reversal Rally from Range Support

  Most popular stories  

Day | Week | Month