Canadian Greenback Technical Forecast: USD/CAD Breakout Burned

Canadian Greenback Technical Forecast: USD/CAD Weekly Commerce Ranges

• Canadian Greenback up to date technical commerce ranges – Weekly Chart
• USD/CAD rally extends into confluent resistance – risk for exhaustion / worth inflection
• Help 1.3512, 1.3370/84 (key), 1.3224 – Resistance 1.3971 (key), 1.4098, 1.4336

The US Greenback breakout has crushed the Canadian Greenback by practically 8% off the September lows in USD/CAD with the rally extending right into a key technical confluence as we speak on the again of hotter than anticipated US inflation information (CPI). Whereas the medium-term outlook stays weighted to the topside, the speedy advance could also be susceptible whereas under this threshold. These are the up to date targets and invalidation ranges that matter on the USD/CAD weekly technical worth chart. Overview my newest Technique Webinar for an in-depth breakdown of this Loonie setup and extra.

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Canadian Greenback Worth Chart – USD/CAD Weekly

Chart Ready by Michael Boutros, Technical Strategist; USD/CAD on Tradingview

Notes: In final month’s Canadian Greenback Weekly Technical Forecast, I famous to, “be looking out for draw back exhaustion forward of 1.3370 IF worth is certainly heading larger on this stretch – a detailed above 1.3812 is required to mark resumption with the subsequent main degree of resistance eyed on the 2020 March reversal-close at 1.3971.” A pullback from near-term resistance noticed USD/CAD register a low at 1.3502 the next week earlier than ripping larger with as we speak’s advance registering a excessive at 1.3977! We’re looking out for doable worth inflection right here into this technical confluence zone.

Preliminary weekly assist rests across the median-line / final week’s low / 23.6% Fibonacci retracement of the 2021 advance at 1.3502/12 – a weekly shut under this threshold can be wanted to recommend a extra vital excessive was registered this week with broader bullish invalidation now raised to the 2018 high-week shut / September 2020 high-close at 1.3370/84.

A topside breach / shut above this key pivot zone is required to maintain the speedy long-bias viable with subsequent topside resistance targets eyed on the 78.6% retracement of the 2020 decline at 1.4098 and the 2020 high-week shut at 1.4336.

Backside line: The USD/CAD breakout has now prolonged into confluent pattern resistance- danger for doable topside exhaustion / worth inflection into this threshold. From a buying and selling standpoint, a superb zone to scale back long-exposure / increase protecting stops- losses needs to be restricted to the median-line IF worth is certainly heading larger on this stretch with a weekly shut above 1.3971 wanted to gas the subsequent leg in direction of 1.41 and past. I’ll publish an up to date Canadian Greenback Shor-term Worth Outlook as soon as we get additional readability on the near-term USD/CAD technical commerce ranges.

For an entire breakdown of Michael’s buying and selling technique, evaluation his Foundations of Technical Evaluation sequence on Constructing a Buying and selling Technique

Canadian Greenback Dealer Sentiment – USD/CAD Worth Chart

• A abstract of IG Consumer Sentiment reveals merchants are net-short USD/CAD – the ratio stands at -2.23 (31.00% of merchants are lengthy) – sometimes bullish studying
• Lengthy positions are 8.30% larger than yesterday and 15.93% decrease from final week
• Quick positions are 4.55% larger than yesterday and 18.71% larger from final week
• We sometimes take a contrarian view to crowd sentiment, and the actual fact merchants are net-short suggests USD/CAD costs might proceed to rise. Merchants are much less net-short than yesterday however extra net-short from final week. The mixture of present positioning and up to date adjustments provides us an additional combined USD/CAD buying and selling bias from a sentiment standpoint.

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Lively Weekly Technical Charts

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— Written by Michael Boutros, Technical Strategist with DailyFX

Comply with Michael on Twitter @MBForex