USD/CAD Opens Feb during Support- Rallies to Be Sold

USD/CAD Daily Price Chart

USD/CAD Price Chart - Daily Timeframe

Technical Outlook: USD/CAD broke below a monthly opening-range lows on Jan 24th with a decrease holding cost to uninformed four-month lows into a start of Feb trade. Daily support rests only reduce during 1.2244 where a 78.6% retracement of a Sep allege converges on 2017 slope support.

A mangle next this connection segment would be indispensable to keep a short-bias in play with such a unfolding targeting successive support objectives during a 2017 low-day tighten during 1.2156 and a 2017 low / Fibonacci connection during 1.2025/56. Daily insurgency is eyed during a 1.2388-1.2416 operation with broader bearish cancellation adult during 1.2581/97 a segment tangible by a monthly open, a yearly opening-range high and a 100-day relocating average.)

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USD/CAD 240min Price Chart

USD/CAD Price Chart - 240min Timeframe

Notes: A closer demeanour during cost movement sees Loonie trade within a proportions of a well-defined forward channel arrangement fluctuating off a Jan highs with a top together serve highlighting insurgency during 1.2388. The evident concentration is on a mangle of a 1.2241-1.2388 operation to offer near-term guidance.

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Bottom line: Although a broader opinion stays weighted to a downside, a evident decrease is exposed while above 1.2241. From a trade standpoint I’ll preference vanishing strength while within this arrangement with a mangle next channel support expected to fuel accelerated waste towards successive support objectives during 1.2025/56. Keep in mind we get a recover of U.S. NFPs (Non-Farm Payrolls) tomorrow with a eventuality expected to fuel increasing sensitivity in a USD crosses.

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USD/CAD IG Client Sentiment

USD/CAD IG Client Sentiment

  • A outline of IG Client Sentimentshows traders are net-long USDCAD- a ratio stands during +1.42 (58.7% of traders are long) – bearishreading
  • Retail has remained net-long given Jan 25th; cost has changed 0.6% reduce given then
  • Long positions are 3.4% aloft than yesterday and 14.4% aloft from final week
  • Short positions are 5.9% reduce than yesterday and 21.9% 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. Retail is serve net-long than yesterday and final week, and a multiple of stream positioning and new changes gives us a stronger USDCAD-bearish contrarian trade bias from a view standpoint.

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Relevant USD/CAD Data Releases

USD/CAD Economic Calendar

Other Setups in Play

– Written by Michael Boutros, Currency Strategist with DailyFX

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