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Loonie carves monthly opening-range just below the 2012 TL- Shorts favored sub-1.26 Check out our new 4Q projections in our Join Michael for Live Weekly Strategy Webinars on USD/CAD Daily Chart
Technical Outlook: USD/CAD has carved out a well-defined monthly opening-range just below the 2012 trendline. with the outlook weighted to the downside while below this threshold. The immediate focus is on a break of the 1.2415-1.26 range (break lower favored).
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USD/CAD 240min
Notes: A closer look at price action shows the pair trading within the confines of a with Loonie versing sharply off the upper parallel this week. The focus remains weighted to the downside within this formation with the lower parallel further highlighting confluence support at 1.2416/20.
A break below basic trendline support extending off the September lows (currently ~1.2380s) would suggest that a more significant high is in place with such a scenario targeting 1.2331/40 and the 61.58% retracement at 1.2268. Bottom line: we'll favor fading strength while below the weekly high with a breach above 1.2625 needed to shift the broader bias back to the long-side. Added caution is warranted heading into the close of the week with the release of Canada CPI on Friday likely to fuel increased volatility in the crosses.
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A summary of shows traders are net-long USDCAD- the ratio stands at +1.15 (53.4% of traders are long) Weak bearishreading Long positions are 0.6% higher than yesterday and 6.3% higher from last week Short positions are 0.5% lower than yesterday and 13.3% lower from last week We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests USDCAD prices may continue to fall. Traders are further net-long than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger USDCAD-bearish contrarian trading bias. See how shifts in USDCAD retail positioning are impacting price trends-
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- Written by Michael Boutros, Currency Strategist with DailyFX
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