Canadian Greenback, CAD, USD/CAD Value Evaluation:USD/CAD continues to chip away at early 2020 positive aspects, with value motio
Canadian Greenback, CAD, USD/CAD Value Evaluation:
- USD/CAD continues to chip away at early 2020 positive aspects, with value motion having retraced roughly 78.6% of the early-year transfer.
- CAD weak spot has been of observe these days, though at this level, it has been unable to maintain tempo with USD-weakness.
- USD/CAD could also be positioned properly for themes of USD-strength, ought to these truly come up; whereas short-side continuation within the pair will doubtless face some ingredient of take a look at at a batch of potential assist round 1.3319-1.3330.
USD/CAD: 2020 Giveth, 2020 Taketh Away
It’s already been a climactic yr for USD/CAD and we’re not even 2/3rds of the way in which by means of. The yr began off as considerably of an outlier as USD/CAD kicked off 2020 under the 1.3000 psychological degree that sellers appeared so reticent to check for the majority of final yr. However that weak spot didn’t final for lengthy, and patrons quickly got here in and the primary two-and-a-half months had been marked by an aggressive up-trend, with USD/CAD gaining greater than 1700 pips.
USD/CAD got here inside 25 pips of the 17-year excessive in late-March, and that’s when the proverbial music stopped. Since then – the pair has spent a lot of the time since giving again these early-year positive aspects, with present value motion very close to the 78.6% retracement of the latest main transfer.
USD/CAD Each day Value Chart
Chart ready by James Stanley; USDCAD on Tradingview
Of latest, the large query has been sustainability of the present down-trend. As famous a few weeks in the past, a latest entrance of USD/CAD weak spot has helped to buffer that transfer of USD-weakness within the pair. As USD-weakness confirmed visibly in main pairs corresponding to EUR/USD and AUD/USD, USD/CAD was as an alternative displaying a little bit of stalled or slowed value motion.
Advisable by James Stanley
Constructing Confidence in Buying and selling
That remark from late-July could have relevance with present dynamics: In late-July, the USD/CAD sell-off stalled simply forward of a take a look at of the June swing low. This stalled the pair lengthy sufficient for costs to pose a fast retracement to resistance, which confirmed round 1.3462 which is the 61.8% retracement of the 17-year transfer. Sellers got here again final week, helped alongside by an aggressively bearish theme within the US Greenback, and much like what occurred in late-July, sellers stopped in need of a big swing low lengthy sufficient for a retracement to develop. Friday value motion ran right into a bearish trendline connecting July 19th and August 3rd swing-highs, and to date that trend-line has helped to carry the advance.
USD/CAD 4-Hour Value Chart
Chart ready by James Stanley; USDCAD on Tradingview
USD/CAD Technique Transferring Ahead
Given the harboring Canadian Greenback weak spot, USD/CAD could stay as enticing for themes behind USD-strength; whether or not that’s a short-term pullback or a longer-term reversal. Whereas the downtrend in USD/CAD remains to be intact to a level, the slower trend-side motion than what’s proven in different USD-pairs could act as a constraint for short-USD methods.
| Change in | Longs | Shorts | OI |
| Each day | -2% | 22% | 7% |
| Weekly | -26% | 28% | -10% |
For these which can be searching for bearish continuation in USD/CAD, a key zone of assist seems across the 1.3319-1.3330 space; and a breach under this space can open the door for a retest of the 1.3250 space, after which the 1.3200 space comes into view, which had final helped to set assist in February of this yr.
USD/CAD Two-Hour Value Chart
Chart ready by James Stanley; USDCAD on Tradingview
— Written by James Stanley, Strategist for DailyFX.com
Contact and comply with James on Twitter: @JStanleyFX