On this sequence we scale-back and have a look at the broader technical image to achieve a bit extra perspective on the place we’re in pattern. The Canadian Greenback is the very best performer in opposition to the US Greenback year-to-date with an advance of greater than four.three%. The transfer takes USD/CAD in direction of a essential weekly assist confluence and the main focus is on a response at this zone heading into the open of February commerce. Here are the important thing targets & invalidation ranges that matter on the USD/USD weekly chart.
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USD/CAD Weekly Value Chart
Notes: In final month’s USD/CAD Weekly Technical Outlook our ‘backside line’ famous that worth had, “damaged beneath medium-term uptrend assist after rebounding off essential resistance final week and leaves the danger for additional losses.” The breakdown has now taken worth beneath our closing goal at 1.3113/19 with a extra vital weekly assist barrier seen simply decrease at 1.3037/52– a area outlined by the 52-week & 200-week shifting averages and the 38.2% retracement of the 2017 advance. Notice primary trendline extending off the 2018 low additionally converges on this area and additional highlights its technical significance.
A break / shut beneath this threshold is required to gasoline the following leg in USD/CAD with such a state of affairs focusing on the October low-week reversal shut at 1.2939 and the October swig low at 1.2782. Preliminary resistance now stands on the 1.32-handle with bearish invalidation now lowered to the skin high-week reversal shut at 1.3370.
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Backside line: USD/CAD is approaching a essential weekly assist confluence at 1.3037/57 and we’re in search of a response in worth on a drop into this zone early within the month. From a buying and selling standpoint, a very good space to scale back short-exposure / decrease protecting stops. In the end, we’ll be in search of exhaustion on a rebound in worth to supply extra favorable short-entries focusing on a break of this key assist barrier. Evaluate my newest USD/CAD Value Outlook fora better have a look at the near-term buying and selling ranges.
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USD/CAD Dealer Sentiment
A abstract of IG Shopper Sentiment exhibits merchants are net-short USD/CAD – the ratio stands at -1.34 (42.eight% of merchants are lengthy) – bullish studying
Traders have remained net-short since January 17th; worth has moved 1.three% decrease since then
Lengthy positions are three.eight% decrease than yesterday and 15.7% decrease from final week
Brief positions are 1.1% decrease than yesterday and eight.eight% decrease from final week
We sometimes take a contrarian view to crowd sentiment, and the very fact merchants are net-short suggests USD/CAD costs could proceed to rise. Merchants are additional net-short than yesterday & final week, and the mixture of present positioning and up to date modifications provides us a stronger USD/CAD-bullish contrarian buying and selling bias from a sentiment standpoint
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Related USD/CAD Knowledge Releases
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Earlier Weekly Technical Charts
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— Written by Michael Boutros, Technical Foreign money Strategist with DailyFX
Comply with Michael on Twitter @MBForex