USD/CAD Slips to 7-Month Low

USD/CAD Worth Outlook:

Canadian Greenback Forecast: USD/CAD Slips to 7-Month Low

The Canadian Greenback gained in opposition to its southern counterpart to start out the week, sending USD/CAD to its lowest level since early January. In consequence, the pair has retraced the whole lot of its covid-related explosion and now appears to show unfavourable for the yr. Coupled with contemporary lows and a latest shift within the Fed’s coverage, USD/CAD appears susceptible to additional weak point at this stage.

USD/CAD Worth Chart: Day by day Time Body (December 2019 – August 2020)

With that in thoughts, help beneath the present buying and selling worth is comparatively sparse which can permit for an extension decrease. Whereas the spherical 1.3000 stage could present a modicum of help, I’d argue the 2019 low round 1.2953 would possibly supply extra affect. Both method, months of losses spotlight persistent weak point which might overwhelm each areas of potential help.

Additional nonetheless, IG Consumer Sentiment Knowledge reveals retail merchants stay net-long USD/CAD regardless of latest worth motion. Since we sometimes take a contrarian view to IGCS, the info might also counsel extra weak point forward.

USD/CAD Worth Chart: 4 – Hour Time Body (June 2020 – August 2020)

That mentioned, potential pull backs could permit for enticing entry alternatives. With resistance overhead across the 1.32 mark, a quick retracement would possibly improve the risk-reward profile of such a commerce. Nonetheless, weak point isn’t assured and a convincing escape above the descending trendline from early July might undermine the bearish outlook. Within the meantime, observe @PeterHanksFX on Twitter for updates and evaluation.

–Written by Peter Hanks, Strategist for DailyFX.com

Contact and observe Peter on Twitter @PeterHanksFX