USD/CAD Rally Reverses during Critical Resistance Ahead of Canada CPI

The Canadian Dollar has finally held a bid with USD/CAD reversing neatly off pivotal connection insurgency this week. The span stays exposed while next this threshold with a pullback in cost now coming near-term uptrend support-we’re looking for serve justification that a some-more poignant depletion high might be in place.

USD/CAD Daily Price Chart

USD/CAD Price Chart - Daily Timeframe

Technical Outlook: USD/CAD incited from a pivotal insurgency connection this week during 1.3103/32– a segment where a 100% prolongation of a Sep allege and a 61.8% retracement of a 2017 decrease converges on a top median-line together of a descending pitchfork formation. Note that daily RSI noted transparent dissimilarity into this high with a support trigger pending.

Near-term support rests with a 2017 Jan low during 1.2968 with a daily tighten next indispensable to advise that a some-more poignant high might be in place. Such a unfolding would aim a 2012 trendline that converges on a monthly opening range lows t 1.2803. A topside crack still has to contend with longer-term slope insurgency only bashful of 1.32.

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USD/CAD 240min Price Chart

USD/CAD Price Chart - 240min Timeframe

Notes: A closer demeanour during USD/CAD cost movement shows a span trade within a proportions of a near-term descending channel arrangement fluctuating off a Feb lows. The near-term concentration stays reduce while next 1.3132 with successive support targets eyed during 1.2918– demeanour for a greeting there. A mangle keeps a short-bias in play targeting a monthly open during 1.2829 corroborated closely by 1.2789.

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Bottom line: USD/CAD incited from vicious connection insurgency this week and while a evident concentration is lower, we’ll be looking for a mangle of this bullish arrangement to countenance a incomparable annulment in price. From a trade standpoint, I’ll preference vanishing strength while next a top parallel. Keep in mind that we still have a recover of a FOMC seductiveness rate preference after currently with Canada CPI on daub on Friday.

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USD/CAD IG Client Sentiment

USD/CAD Client Sentiment

  • A outline of IG Client Sentiment shows traders are net-short USDCAD- a ratio stands during -1.6 (39.1% of traders are long) – diseased bullishreading
  • Traders have remained net-short given Mar 1st; cost has changed 1.0% aloft given then
  • Long positions are 29.0% aloft than yesterday and 6.0% aloft from final week
  • Short positions are13.8% reduce than yesterday but 20.9% aloft from final week
  • We typically take a contrarian perspective to throng sentiment, and a fact traders are net-short suggests USDCAD prices might continue to rise. However, retail is reduction net-short than yesterday but some-more net-short from final week and the multiple of stream positioning and new changes gives us a serve churned USDCAD trade bias from a view standpoint.

See how shifts in USD/CAD retail positioning are impacting trend- Learn some-more about sentiment!

Relevant Economic Data Releases

USD/CAD Economic Calendar

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– Written by Michael Boutros, Currency Strategist with DailyFX

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