USD / CAD technical outlook
- USD / CAD trading on the June trendline
- Hold support and might rally, breakout and weakness expected
USD / CAD technical outlook: pressure on trend support
USD / CAD is currently at an important trend support line via the June trendline. He has kept the pair afloat for the past few sessions. Earlier in the week, we saw semi-strong pushing support, validating the importance of trendlines as support.
The line is also in confluence with a period of consolidation which developed during the first fortnight outside September. If support can continue to hold with price remaining above 12,593 on a daily close basis, then USD / CAD still has a chance to stage a rally. This can be a slow development as volatility is generally low, but nonetheless as long as support holds a neutral to bullish trading bias remains unchanged.
On the other hand, if the support breaks here soon, we could see a period of weakness. below these levels would leave the mid-picture in limbo as we haven’t seen any progress on the USD / CAD for some time.
From a tactical point of view, the risk / reward ratio is somewhat in favor of those looking to set bullish bets as the support is right at the feet of the USD / CAD. A little downward push followed by a rejection that keeps the support intact can help build confidence in maintaining the support. But conviction is not particularly strong as the uptrend since June has not been clear for most.
For those looking short, this is considered a dangerous location given that the medium is in current proximity. A break from the aforementioned levels (trendline / 12593) is necessary first before the short side can develop.
USD / CAD Daily Chart
USD / CAD Chart by TradingView
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— Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at@PaulRobinsonFX