USD/CAD rally pushes seven weeks

Canadian Dollar Technical Price Outlook: Short-Term Trading Levels

  • Canadian dollar Updated Technical Trading Levels – Daily and Intraday Charts
  • USD/CAD rally turns into uptrend resistance – short-term inflection risk
  • Resistance 1.3125, 1.3230 (critical), 1.3370- Support 1.2952, 1.2880-1.29 (key), ~1.2815

the American dollars jumped more than 1.18% against the Canadian dollar as USD/CAD attempted to score a seventh consecutive weekly advance. The rally is now testing uptrend resistance and the focus is on a possible price inflection here for guidance. It’s the updated targets and invalidation levels that count on the USD/BODY technical price tables. Review my last Strategy Webinar for an in-depth analysis of this dollar setup and more.

Canadian Dollar Price Chart – Daily USD/CAD

Chart prepared by Michel Boutrostechnical strategist; USD/CAD on Tradingview

Technical outlook: In last month Canadian Dollar Price Outlook we noted that USD/CAD was probing resistance at the March highs while noting that “pullbacks should be limited to 1.2676 IF price heads higher on this stretch with an upper breach above the 1.29 handle exposing new yearly highs. The price dipped on the May open with USD/CAD hitting a low of 1.2713 before reversing sharply higher. The rally is now trying to break through the 38.2% Fibonacci retracement of the 2020 decline to 1.3023– a close above this threshold leaves the door open for further gains towards the upper parallel.

Canadian dollar rate chart – USD/CAD 240min

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

Remarks: A closer look at the Loonie’s price action shows USD/CAD continue to trade within the limits of the ascendant fork formation extending off April lows. Note that the price has been climbing the upper parallel here all week – ultimately an upper breach exposes the March 2018 highs at 1.3125 and key rresistance to the 100% extension of the 2021 advance to 1.3230– look for a bigger reaction there IF achieved. Initial support at 2019 low at 1.2951 supported by the close of the highest day of 2020 / extension of 1.618% at 1.2880-1.29. Broader bullish invalidation now lifted to the lower parallel / 38.2% retracement near ~1.2815.

At the end of the line : USD/CAD is supporting uptrend resistance here and while the focus remains on the top, we are watching for a possible inflection to the upper parallel. From a trading perspective, a good area to reduce long exposure portions / increase protective stop-losses should be limited to 1.2880 IF price heads higher on this stretch with the next major level at 1.3230. Review my latest Canadian Dollar Weekly Price Outlook for a closer look at the longer term technical trading levels of USD/CAD.

For a full analysis of Michael’s trading strategy, see his Fundamentals of Technical Analysis Series on Bbuild a Jrading Sstrategy

Canadian Dollar Traders Sentiment – USD/CAD Price Chart

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

  • A summary of IG Customer Sentiment shows traders are net-short USD/CAD – the ratio stands at -1.37 (42.12% of traders are long) – generally low bullish reading
  • Long positions are5.69% more than yesterday and 14.94% less than last week
  • Short positions are 20.35% more than yesterday and 39.37% more than last week
  • We generally take a contrary view to the sentiment of the crowds, and the fact that traders are net short suggests that USD/CAD prices may continue to rise. Traders are even sharper than yesterday and last week, and the combination of current positioning and recent changes gives us a stronger USD/CAD bullish contrarian trading bias by one feeling point of view.

US and Canada economic calendar

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

Economic calendarthe latest economic developments and the risks associated with future events.

Active technical configurations

– Written by Michel BoutrosTechnical Strategist at DailyFX

To follow MIchael on Twitter @MBForex

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