USD/CAD Daily Chart
Technical Outlook: USD/CAD reversed sharply today off confluence support at 1.2415 (low was 1.2413) – this level is defined by a long-term 61.8% ext of the broader decline off the 2016 high and converges on a parallel support extending off the 9/21 swing low (red). Note that daily momentum is also attempting to break back above the 30-mark and highlights the risk for a near-term recovery in price.
Initial resistance is eyed at the medina-line (currently around the 1.26-handle) and is backed by 1.2723/39. A breach there would be needed to suggest a more significant recovery is underway. If price breaks lower from here, there’s not really much until the 50% retracement at 1.2056.
USD/CAD 240min Chart
Notes: Price has continued to trade within the confines of this near-term descending slope formation with former slope-support further highlighting near-term resistance at Friday’s high ~ 1.2609. Look for a reaction there with a breach higher targeting 1.2680 & confluence resistance at 1.2739 (area of interest for possible short-entries).
From a trading standpoint, I’ll be looking for a breach of the weekly opening range high to validate this near-term reversal in price targeting the highlighted resistance objectives. Keep in mind we have the release of both U.S. & Canadian GDP figures tomorrow and the releases is likely to fuel increased volatility in their respective crosses.
