USD/CAD Technical Outlook
- USD/CAD continues to development decrease inside channel construction
- The weak worth motion is going on beneath long-term help
- Buying and selling bias stays tilted decrease within the absence of aggressive shopping for
USD/CAD weak to additional losses
USD/CAD continues to indicate weak spot inside an intermediate-term channel construction beneath long-term help, which means that decrease ranges lie forward. For some background, the pair broke beneath the 2009 excessive, which turned influential at instances over the previous few years.
The final maintain of the 13000-line was again in September, the place a rally solely resulted in a corrective bounce throughout the downtrend off the March spike-high. The minor take a look at in November lasted solely briefly earlier than USD/CAD lastly misplaced the long-term threshold final month. It was briefly examined simply previous to Christmas, however confirmed as a former degree of help now turned resistance.
This stored the channel construction since early November creating as nicely. With the channel in play and the absence of any robust shopping for efforts, the bias at the moment is in direction of seeing decrease ranges. The underside of the channel might provide minor help within the mid-12400s, however isn’t seen as significant given the general development.
Pulling again to the long-term chart (month-to-month), there isn’t any substantial worth help till the late 2017 and early 2018 lows. This ranges from 1.2061 (2017 low) as much as 1.2247 (2018 low). This implies there could also be a good quantity extra of downward stress earlier than we see a significant rally develop.
To negate this bearish outlook, some work is required. First, the intermediate-term channel will have to be snapped by worth crossing above the higher parallel, however then that can finally have to be adopted by a agency recapturing of the 13000-line.
Recommended by Paul Robinson
Check out the Q1 USD Forecast
USD/CAD Month-to-month Chart (beneath long-term help)
USD/CAD Each day Chart (firmly inside channel)
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—Written by Paul Robinson, Market Analyst
You possibly can observe Paul on Twitter at @PaulRobinsonFX
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