Canadian Greenback, USD/CAD, Loonie Worth OutlookUSD/CAD spent a month in a spread, however noticed sellers pounce this week. As
Canadian Greenback, USD/CAD, Loonie Worth Outlook
- USD/CAD spent a month in a spread, however noticed sellers pounce this week.
- As USD has pushed right down to a contemporary low, USD/CAD has adopted.
- An enormous stage of help lurks just under present costs – the identical that turned across the June sell-off; will consumers present up for a second spherical of help or will sellers’ persistence drive to a good lower-low?
USD/CAD Breaks Down, Leaves 1.3500 Behind
Consistency generally is a wanted trait for merchants on the lookout for amenable markets, and for greater than a month, USD/CAD remained in a reasonably constant range-bound sample. That vary inbuilt help across the 1.3500 deal with, and noticed no fewer than 4 separate exams of this zone from mid-June into mid-July. Context could be useful, as properly, so earlier than this vary had constructed, a constant sell-off had pushed USD/CAD right down to a key spot on the chart, taken from across the 1.3315 space that features as each the March swing low and the 78.6% Fibonacci retracement of the 2020 transfer within the pair.
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That confluent value helped to cease the sell-off lifeless in its tracks; and costs quickly pushed again into the vary that held by June and into July. However this week noticed some change present up as sellers lastly grabbed the reins to push value motion right down to a contemporary month-to-month low, lastly taking out that 1.3500 help zone alongside the best way.
USD/CAD 4-Hour Worth Chart
Chart ready by James Stanley; USDCAD on Tradingview
USD/CAD Finds Resistance at Prior Help – Then Goes
As checked out within the Tuesday webinar, the breakdown in USD/CAD gave the impression to be a bit extra delicate than the same breakouts exhibiting in different USD-pairs. And given the truth that the help zone taken-out had elicited no fewer than 4 exams since early-June, and it is smart as to why sellers might have been trepidatious to proceed driving while at that contemporary near-term low.
However yesterday noticed a fast flicker of energy, simply lengthy sufficient for value motion to push as much as that prior zone of help. The worth of 1.3483 was key as this marks yesterday’s excessive and can also be the low from 23 June: After that stage got here into play throughout yesterday’s commerce sellers got here again, took management, and continued to drive down to a different contemporary low.
| Change in | Longs | Shorts | OI |
| Day by day | 7% | -13% | -3% |
| Weekly | -16% | 27% | -2% |
The massive query now’s for the way lengthy would possibly bears be capable to drive? One other key level of help is quick approaching and this might complicate bearish continuation performs as value motion has moved additional and additional away from any latest factors of resistance. This may hold the door open for a potential second take a look at of resistance at that prior zone of help. Of specific be aware is the worth of 1.3462, marking the underside of this zone and functioning because the 61.8% retracement of the long-term main transfer, spanning the 2001 excessive right down to the 2008 low. That value, prolonged as much as the 1.3500 psychological stage, contains the zone and a maintain of resistance right here can hold the door open for bearish continuation eventualities.
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Jul 28
( 17:07 GMT )
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USD/CAD 4-Hour Worth Chart
Chart ready by James Stanley; USDCAD on Tradingview
— Written by James Stanley, Strategist for DailyFX.com
Contact and observe James on Twitter: @JStanleyFX