USD/CAD broke through a key pivot zone last week at 1.3721/94- a region defined by the 38.2% retracement of the 2021 advance and the 61.8% retracement of the late-2023 advance. The subsequent decline is now extending more than 2.9% off the May highs with initial support within striking distance.
Weekly momentum has now dropped to the lowest levels since 2021 and a break of the 2021 uptrend (2022 trendline) threatens further losses ahead. Initial weekly support rests at the 1.618% extension of the February decline / 78.6% retracement of the late-2023 advance near 1.3504/23. Note that basic channel support converges on this threshold over the next few weeks and further highlights the technical significance of this zone (area of interest for possible downside exhaustion / price inflection IF reached). Subsequent support rests with the 2024 low-week clow (LWC) at 1.3360 and the 2023 LWC at 1.3218.
Weekly resistance is now eyed back at 1.3721 & 1.3795. Broader bearish invalidation is now lowered to the 52-week moving average / 2022 swing high near ~1.3961/78- a breach / close above the yearly channel would ultimately be needed to suggest a more significant low is in place.
Bottom line: USD/CAD has broken below multi-year uptrend support and threatens further losses in the weeks ahead. From a trading standpoint, look to reduce portions of short-exposure / lower protective stops on stretch towards 1.3523 IF reached- rallies should be limited to 1.3795 IF price is heading lower on this break with a close sub-1.35 needed to fuel the next major leg of the decline.
-MB
Weekly momentum has now dropped to the lowest levels since 2021 and a break of the 2021 uptrend (2022 trendline) threatens further losses ahead. Initial weekly support rests at the 1.618% extension of the February decline / 78.6% retracement of the late-2023 advance near 1.3504/23. Note that basic channel support converges on this threshold over the next few weeks and further highlights the technical significance of this zone (area of interest for possible downside exhaustion / price inflection IF reached). Subsequent support rests with the 2024 low-week clow (LWC) at 1.3360 and the 2023 LWC at 1.3218.
Weekly resistance is now eyed back at 1.3721 & 1.3795. Broader bearish invalidation is now lowered to the 52-week moving average / 2022 swing high near ~1.3961/78- a breach / close above the yearly channel would ultimately be needed to suggest a more significant low is in place.
Bottom line: USD/CAD has broken below multi-year uptrend support and threatens further losses in the weeks ahead. From a trading standpoint, look to reduce portions of short-exposure / lower protective stops on stretch towards 1.3523 IF reached- rallies should be limited to 1.3795 IF price is heading lower on this break with a close sub-1.35 needed to fuel the next major leg of the decline.
-MB
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.