Canadian Dollar Forecast: USD/CAD Breakdown– Loonie Levels

Canadian Dollar Technical Forecast: USD/CAD Weekly Trade Levels

• Canadian Dollar updated technical trade levels – Weekly Chart
• USD/CAD attempting to break below multi-month uptrend support
• Weekly support 1.2460, 1.2314/66 (key) – Resistance 1.2713, 1.2822 (bearish invalidation)

The Canadian Dollar is attempting a third consecutive weekly advance against the US Dollar with USD/CAD down 2.8% off the September highs. The decline marks a break of the June uptrend and while the longer-term outlook remains constructive, the medium-term risk remains for a deeper plunge here and we’re on the lookout for an exhaustion low in the weeks ahead. These are the updated targets and invalidation levels that matter on the USD/CAD weekly technical price charts. Review my latest Strategy Webinar for an in-depth breakdown of this Loonie technical setup and more.

Canadian Dollar Price Chart – USD/CAD Weekly

Chart Prepared by Michael Boutros, Technical Strategist; USD/CAD on Tradingview

Notes: In last month’s Canadian Dollar Weekly Price Outlook we noted that the, “USD/CAD rebound remains vulnerable while below 1.2822- we’re on the lookout for a low in the weeks ahead. From a trading standpoint, look for possible downside exhaustion ahead of 1.23 IF prices are indeed heading higher…” Price briefly registered an intraday high at 1.2896 the following week before reversing sharply to close back below the yearly high-day close at 1.2822. The subsequent decline is now attempting to break below channel support and threatens a larger correction in the days ahead- watch the weekly close.

Initial weekly support objectives eyed at 1.2460/62 – a region defined by the 2016 swing low and the 100% extension of the August decline. Critical support remains unchanged at the 2018 low / 61.8% Fibonacci retracement of the yearly rangeat 1.2314/66. Both of these represent levels of interest for possible downside exhaustion IF reached. Weekly resistance stands with the objective yearly open at 1.2713 with a breach / close above the yearly high-week close at 1.2822 needed to mark resumption towards 1.2975-1.3023.

Bottom line: USD/CAD has broken below multi-month uptrend support and threatens a larger correction in the weeks ahead. From a trading standpoint, rallies should be capped by the yearly open IF price is heading lower – look to reduce short-exposure / lower protective stops on stretch towards 1.2460. Ultimately, a larger pullback may offer more favorable opportunities closer to trend support. Review my latest Canadian Dollar Price Outlookfor a closer look at the near-term USD/CAD technical trade levels.

For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy

Canadian Dollar Trader Sentiment – USD/CAD Price Chart

• A summary of IG Client Sentiment shows traders are net-long USD/CAD – the ratio stands at +2.14 (68.20% of traders are long) – typically bearish reading
• Long positions are9.79%…