Canadian Greenback Worth Outlook:
Repeatedly failing to breakthrough resistance round 1.335, USDCAD broke decrease on Wednesday which has opened the door to higher lossesA Fed blackout week may see themes outdoors of financial coverage dictate US Greenback value motionThe Canadian Greenback could also be equally devoid of financial coverage commentary within the close to time period following Wednesday’s Financial institution of Canada charge choice
Canadian Greenback Worth Outlook: USD/CAD Bearish Reversal Underway
Three weeks in the past I highlighted a bearish buying and selling alternative on USDCAD amid a sequence of failed assessments at resistance. Evidently, the probes continued however bears stood their floor affording the pair little progress increased. Following a comparatively hawkish financial coverage stance from the Financial institution of Canada, the US Greenback broke decrease towards its Canadian Greenback counterpart on Wednesday and continued its descent on Friday as I outlined in my webinaron Thursday.
USD/CAD Worth Chart: Each day Time Body (January – September) (Chart 1)
Consequently, USDCAD has delivered a confirmed break of the ascending trendline that originated in mid-July and the horizontal help from March. Additionally slipping beneath its 200-period transferring common, bearish momentum might proceed which is able to permit for adjusted areas of curiosity and invalidation. With the preliminary invalidation zone comfortably out of attain, the secondary invalidation level will now reside close to the 1.3250 stage – coinciding with the horizontal resistance from March.
Likewise, areas of curiosity must also be adjusted decrease. Provided that IG Consumer Sentiment knowledge reveals retail merchants have gotten extra bullish, the converging positioning suggests the pair could possibly be destined for a deeper reversal. If retail positioning flips totally to the bullish facet and continues to diverge, USDCAD may look to check July lows.
USD/CAD Worth Chart: four – Hour Time Body (July – September) (Chart 2)
Subsequently, a brand new focal point on USDCAD might be discovered close to the help provided in mid-July across the 1.3016 stage. A sticking level may materialize on the varied swing highs in mid-July across the 1.3146 space however appears unlikely to single-handedly rebuke a continuation decrease. As value motion unfolds, comply with @PeterHanksFX on Twitter for updates and evaluation on this USDCAD buying and selling alternative.
–Written by Peter Hanks, Junior Analyst for DailyFX.com
Contact and comply with Peter on Twitter @PeterHanksFX
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