Canadian Dollar Rate Forecast: USD/CAD Price Rally at Risk

(MENAFN- DailyFX) USD/CADprice recovery at risk into 1.3258 – On the lookout for topside exhaustion Check out our 2019 projections in ourFree DailyFX USD Trading Forecasts Join Michael for Live Weekly Strategy Webinars onMondays at 12:30GMT

TheCanadian Dollaris down more than 0.5% against theUS Dollarsince the start of the week with a breach of the weekly opening-range highs taking the exchange rate towards near-term down-trend resistance into the close of the week. These are the updated targets and invalidation levels that matter on theUSD / CADcharts.Review this week's Strategy Webinarfor an in-depth breakdown of this Sterling price setup and more.

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Chart Prepared byMichael Boutros , Technical Strategist;USD/CAD on Tradingview

Technical Outlook: In my most recentCanadian Dollar Price Outlookwe noted thatUSD/CADwas 'testing a key near-term inflection zone at 1.3145/55- a region defined by the 61.8% retracement of the Julye advance and the July opening-range high.' We highlighted the price rebound off this zone in this week'sUSD/CAD Analyst Pick , citing that the, 'The immediate risk remains higher for now after rebounding off downtrend support with initial resistance objectives at 1.3228 & 1.3246 – both levels of interest for possible topside exhaustion IF reached.' Loonie is testing these targets today.

Daily resistance stands at the March swing low / 50%retracementat 1.3251/58 – a close above this threshold is needed to suggest a more significant low was registered this week. A break below daily support at 1.3145/55 would mark resumption with such a scenario targeting 1.3094.

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Chart Prepared byMichael Boutros , Technical Strategist;USD/CAD on Tradingview

Notes: A closer low at Canadian Dollar price action sees USD/CAD continuing to trade within the confines the descendingpitchfork formationwe've been tracking for over a week now. A breach above the weeklyopening-rangehighs has fueled a near-term breakout in price with the advance now targeting confluence resistance at the 50% retracement / 100% extension at 1.3257/58- look for a reaction there.

Failure here would shift the focus towards near-term support at 1.3214 backed by the weekly open at 1.3175. A breach would likely fuel an accelerated rally exposing subsequent topside resistance objectives at 1.3288 with broader bearish invalidation at 1.3306.

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Bottom line: The USD/CAD rebound is eyeing initial resistance here and IF this rebound is corrective, price should be caped by the 75% parallel just higher. From at trading standpoint, look to reduce long-exposure / raise protective stops on a stretch into 1.3257/58- be on the lookout for topside exhaustion with a move back below the median-line needed to mark resumption of the near-term decline. Review my latestCanadian Dollar Weekly Price Outlookfor a longer-term look at the technical picture forUSD/JPY .

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- Written byMichael Boutros , Currency Strategist with DailyFX

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