USD/CAD Bears to Face NFP / Canada Employment

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USD/CAD Weekly Chart

USD/CAD Price Chart - Weekly Timeframe

Technical Outlook: In final month’s USD/CAD Weekly Technical Perspective we remarkable that, “50% retracement of a 2017 range- note that this turn converges on a downslope insurgency and has continued to oversee a highs given late-October. Heading into a tighten of a year a concentration is on a mangle of a 1.2575-1.2927 operation to offer superintendence (downside mangle favored).

An outward weekly-reversal candle off 1.2927 in mid-December shifted a concentration to slope support with a mangle reduce final week gripping a broader concentration reduce in USDCAD (note that Dec also noted and outward monthly-reversal candle- bearish). That said, a weekly tighten subsequent a long-term 200-week relocating normal would be indispensable to keep a evident decrease viable.

USD/CAD Daily Chart

USD/CAD Price Chart - Daily Timeframe

The daily draft highlights near-term connection insurgency during 1.2598 where a Oct opening-range high converges on a 100-day relocating average. This turn is corroborated by a 2012 trendline (red) with a broader bearish cancellation turn solid during a slope fluctuating off a 2017 highs (purple) now ~1.2750s.

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USD/CAD 240min Chart

USD/CAD Price Chart - 240min Timeframe

Notes: A closer demeanour during cost movement sees a span trade within a proportions of a descending pitchfork formation fluctuating off a late-October high. Interim support targets rest during 1.2485/89 corroborated by a reduce median-line together (currently ~1.2440s) and a triple-top totalled design / 61.8% prolongation during 1.2415/23– Note that this threshold converges on a reduce together streamer into subsequent week.

Bottom line: Near-term bullish dissimilarity into these lows highlights a hazard of a liberation here though eventually we’ll preference vanishing strength in a span while subsequent a median-line / 1.2660. Keep in mind that tomorrow represents substantial eventuality risk for a span with a coexisting recover of a U.S. Non-Farm Payroll news (NFP) and Canada employment total expected to fuel combined sensitivity in a USD CAD crosses.

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USD/CAD IG Client Sentiment

  • A outline of IG Client Sentimentshows traders are net-long USDCAD- a ratio stands during +2.11 (67.8% of traders are long) – bearish reading
  • Retail has remained net-long given Dec 21; cost has changed 2.7% reduce given then
  • Long positions are 12.3% aloft than yesterday and 26.0% aloft from final week
  • Short positions are 1.8% reduce than yesterday and 9.3% reduce from final week
  • We typically take a contrarian perspective to throng sentiment, and a fact traders are net-long suggests USDCAD prices might continue to fall. Traders are serve net-long than yesterday and final week, and a multiple of stream view and new changes gives us a stronger USDCAD-bearish contrarian trade bias.

See how shifts in USD/CAD sell positioning are impacting trend- Click here to learn some-more about sentiment!

Relevant Data Releases

USDCAD Economic Calendar

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– Written by Michael Boutros, Currency Strategist with DailyFX

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