On this collection we scale-back and have a look at the broader technical image to achieve a bit extra perspective on the place we’re in development. The Canadian Greenback has rallied greater than three.1% towards the US Greenback for the reason that begin of the 12 months with USD/CAD reversing sharply from a vital resistance barrier we’re been monitoring. Here are the important thing targets & invalidation ranges that matter on the USD/CAD weekly chart into the beginning of the 12 months.
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USD/CAD Weekly Value Chart
Notes: In final month’s Canadian Greenback Weekly Technical Outlook we famous that USD/CAD was testing a, “main confluence resistance zone on the 61.eight% retracement of the 2016 decline / 2017 high-week shut at 1.3647/86.” Value registered a excessive at 1.3364 earlier than posting an outside-week reversal with the decline breaking beneath the October trendline.
Value has already lined 50% of the latest advance with and the 2018 RSI help set off now being examined. Though we might see some reduction near-term, the broader focus stays weighted to the draw back whereas beneath the 2017 open at 1.3435 with subsequent help aims eyed on the 61.eight% retracement at 1.3119 and the highlighted slope / transferring common confluence zone round 1.3000/30– ranges of curiosity for attainable value exhaustion.
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Backside line:USD/CAD has damaged beneath medium-term uptrend help after rebounding off vital resistance final week and leaves the danger for additional losses in value. We’ll proceed to favor fading energy whereas beneath 1.3435 – Finally, a bigger pullback might provide extra favorable long-entries nearer to the decrease parallels. I’ll publish an up to date USD/CAD technical outlook as soon as we get additional readability on near-term value motion.
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USD/CAD Dealer Sentiment
A abstract of IG Consumer Sentiment exhibits merchants are net-short USD/CAD – the ratio stands at -1.18 (45.9% of merchants are lengthy) – weak bullish studying
Traders have remained net-short since October 9th; value has moved 2.1% greater since then
Lengthy positions are 13.5% greater than yesterday and 223.eight% greater from final week
Quick positions are 11.9% decrease than yesterday and 40.9% decrease from final week
We usually take a contrarian view to crowd sentiment, and the actual fact merchants are net-short suggests USD/CAD costs might proceed to rise. But merchants are much less net-short than yesterday and in contrast with final week. Current modifications in sentiment warn that the present USD/CAD value development might quickly reverse decrease regardless of the actual fact merchants stay net-short.
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Related USD/CAD Information Releases
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Earlier Weekly Technical Charts
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— Written by Michael Boutros, Technical Forex Strategist with DailyFX
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