(MENAFN-DailyFX) Canadian Dollar Technical Forecast: USD/CAD Weekly Trading Levels
- Canadian Dollar updated trading technical levels – weekly chart
- USD/CAD fails on third attempt to break key resistance, fails – risk of correction
- Support 1.2784, 1.2688, 1.2640 (critical) – resistance 1.2975-1.3023 (key), 1.3230, 1.3370
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The Canadian Dollar has gone on the offensive against the US Dollar this week, with USD/CAD falling more than 1.2%. A third reversal of major technical resistance makes the broader uptrend vulnerable again in the coming days and the correction could present more favorable opportunities closer to trend support. These are the updated targets and invalidation levels of significance on the USD/CAD weekly technical price chart. Watch my latest weekly strategy webinar for a detailed breakdown of this Loonie technical setup and more.
Canadian Dollar Price Chart – USD/CAD Weekly
Diagram created by Michael Boutros, Technical Strategist; USD/CAD on trade view
Notes: In my most recent weekly Canadian Dollar Technical Forecast, we noted that “USDCAD is testing a key resistance pivot here for the third time, and once again the immediate long bias could be vulnerable while below it.” That The level of focus was 1.2975-1.3023 – a region defined by the 2020 full year target and the 38.2% Fibonacci retracement of the 2020 decline. The price posted an intraweek high just a few pips away from 100% extension of the 2021 surge at 1.3230 (1.3223 high) but failed to mark a weekly close above it. The subsequent trend reversal is now down more than 2.8% with USDCAD within striking distance of the month’s low.
Initial weekly support rests on June weekly close low at 1.2784 and is supported by 52 week moving average at 1.2688. Broader bullish invalidation remains unchanged with lower parallel / objective year open at 1.2640. Upper resistance holds steady at 1.3023, with a break/weekly close above needed to mark the resumption towards 1.3230 and 1.3370 weekly high of 2018.
Conclusion: USDCAD is testing a key resistance pivot here for the third time and once again the immediate long bias could be vulnerable while below. A good zone to reduce long exposure / increase protective stops from a trading perspective – losses should be capped at 1.2784 if IF price is trending higher along this stretch. Check out my current Canadian Dollar Short-Term Price Outlook for a closer look at short-term USDCAD technical trading levels.
For a full breakdown of Michael’s trading strategy, see his Fundamentals of Technical Analysis series on building a trading strategy
Canadian Dollar Trader Sentiment – USD/CAD price chart
- A summary of IG client sentiment shows that traders are net long USD/CAD – the ratio is +1.79 (64.11% of traders are long) – typically a bearish read
- Long positions are down 0.36% from yesterday and up 39.75% from last week
- Short positions are 7.19% higher than yesterday and 21.75% lower than last week
- We typically view crowd sentiment as contrarian and the fact that traders are net long suggests that USD/CAD could continue falling. Traders are less net long than yesterday but more net long since last week. The combination of current positioning and recent changes gives us another mixed USD/CAD trading bias from a sentiment perspective.
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— Written by Michael Boutros, Technical Strategist at DailyFX
Follow Michael on Twitter @MBForex
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