Canadian Dollar Technical Price Outlook: Near-term Trade Levels

  • Canadian Dollar updated technical trade levels – Daily & Intraday Charts
  • USD/CAD plunges into key technical support zone- risk for near-term inflection
  • Resistance 1.2546, 1.22640/47 (key) – Support 1.2432/70 (key), 1.2362/72 (critical)

The Canadian Dollar surged more than 1.47% against the US Dollar since the start of the week with USD/CAD plunging into a key technical support zone today. The bears may be vulnerable into this threshold and we’re looking for a possible inflection in the days ahead. These are the updated targets and invalidation levels that matter on the USD/CAD price charts. Review my latest Strategy Webinar for an in-depth breakdown of this Loonie technical setup and more.

Canadian Dollar Price Chart – USD/CAD Daily

Canadian Dollar Price Chart - USD/CAD Daily - Loonie Trade Outlook - Technical Forecast

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

Technical Outlook: The US Dollar has plummeted more than 2.8% off the monthly highs with a break below confluent support at the monthly open / opening-range lows taking price towards a key support zone today at the 78.6% Fibonacci retracement of the October rally / 100% extension of the December decline at 1.2432/70. Note that the lower parallel of the ascending pitchfork we’ve been tracking off the 2021 lows also converges on this zone and the immediate decline may be vulnerable into this region – we’re looking for possible price inflection down here.

Canadian Dollar Price Chart – USD/CAD 240min

Canadian Dollar Price Chart - USD/CAD 240min - Loonie Trade Outlook - Technical Forecast

Notes: A closer look at Loonie price action shows USD/CAD trading within the confines of a near-term descending pitchfork off the December highs with the 25% parallel further highlighting near-erm support into 1.2432/70. Initial resistance now eyed at 1.2546 with near-term bearish invalidation set to the 2022 / weekly opens at 1.2640/47. A break below this key threshold could fuel another accelerated bout of losses with such a scenario exposing subsequent support objectives at the October low-day close / 61.8% retracement of the June advance at 1.2362/72 and the lower parallel / 1.2288.

Bottom line: A break of the monthly opening-range takes USD/CAD into multi-month uptrend support – battle-lines drawn heading into the close of the week. From at trading standpoint, a good region to reduce short-exposure / lower protective stops – rallies should be capped by the weekly open IF price is indeed heading lower. Review my latest Canadian Dollar Weekly Price Outlook for a closer look at the longer-term USD/CAD technical trade levels.

For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy

Canadian Dollar Trader Sentiment – USD/CAD Price Chart

Canadian Dollar Trader Sentiment - USD/CAD Price Chart - Loonie Retail Positioning - Technical Outlook

  • A summary of IG Client Sentiment shows traders are net-long USD/CAD – the ratio stands at +2.52 (71.56% of traders are long) – typically bearish reading
  • Long positions are12.45% higher than yesterday and 62.50% higher from last week
  • Short positions are 14.54% lower than yesterday and 11.43% lower from last week
  • We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests USD/CAD prices may continue to fall. Traders are further net-long than yesterday and last week, and the combination of current positioning and recent changes gives us a stronger USD/CAD-bearish contrarian trading bias from a sentiment standpoint.

Key US / Canada Data Releases

Key US / Canada Data Releases - USD/CAD Economic Calendar - Loonie Weekly Event Risk

Economic Calendarlatest economic developments and upcoming event risk.

Active Technical Setups

– Written by Michael Boutros, Currency Strategist with DailyFX

Follow Michael on Twitter @MBForex


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