(MENAFN- DailyFX) USD/CADtesting key weekly support zone at 1.2972-1.3052– Focus is on the weekly close Check out our 2019 projections in ourFree DailyFX US Dollar Trading Forecasts Join Michael for Live Weekly Strategy Webinars onMondays at 12:30GMT
The Canadian Dollar is up more than 4% against theUS Dollarsince the May highs inUSD/CADwith the recent sell-off in price taking Loonie into critical pivot zone. These are the updated targets and invalidation levels that matter on the Loonie (USD/CAD) weekly price chart.Review my latestWeekly Strategy Webinarfor an in-depth breakdown of thisgold pricesetup and more.
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USD/CAD Price Chart - Loonie Weekly
Notes: In my lastLoonie Weekly Price Outlookwe highlighted that, 'The focus remains on a drop towards key support at 1.3052/68 on the back of last week's reversal. From a trading standpoint, look to reduce short-exposure / lower protective stops on a move towards the yearly range lows- look for a reaction there.' The 100% extension of the December decline extends the range to 1.2972-1.3052 and USD/CAD has been testing this support zone for the past three weeks.
Note that the 2017 trendline rests just lower and a break / close below this threshold is needed to validate a break of the yearly opening-range with such a scenario targeting 1.2782 and the 61.8%retracementat 1.2674. Weekly resistance stands at 1.3274 with broader bearish invalidation at the yearly high-week reversal close at 1.3371.
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Bottom line: The immediate focus is on a reaction of this key zone at 1.2972-1.3052 – watch the weekly close. From a trading standpoint, look to reduce short-exposure / lower protective stops in this zone. IF this is a break of the yearly range-low and price is indeed heading lower, intra-week spikes should be capped by 1.3274. I'll publish an updatedLoonie Price Outlookonce we get further clarity in near-term USD/CAD price action.
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Loonie Trader Sentiment (USD/CAD)
A summary ofIG Client Sentimentshows traders are net-long USD/CAD - the ratio stands at +1.5 (60.0% of traders are long) – bearish reading Traders have remained net-long since June 26th; price has moved 1.0% lower since then Long positions are 0.9% higher than yesterday and 12.6% lower from last week Short positions are 10.5% lower than yesterday and 12.3% higher from last week We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggestsUSD / CADprices may continue to fall. Traders are further net-long than yesterday & last week, and the combination of current positioning and recent changes gives us a stronger USD/CAD-bearish contrarian trading bias from a sentiment standpoint.
See how shifts in Loonie retail positioning are impacting trend-Learn more about sentiment!
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--- Written byMichael Boutros , Technical Currency Strategist with DailyFX
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