USD/CAD : Key Support

(Wed, 17 Feb 2021). The Canadian Dollar fractionally lower against the US Dollar with USD/CAD defending the yearly range-lows into the open of the week. The rebound threatens the broader bearish stance and we continue to look for inflection off this zone to offer guidance in the days ahead on whether this is a bear market recovery or a larger reversal. These are the updated targets and invalidation levels that matter on the USD/CAD weekly technical price.

CANADIAN DOLLAR PRICE CHART – USD/CAD WEEKLY

Notes: In last month’s Canadian Dollar Weekly Price Outlook we noted that the, “USD/CAD breakdown may be losing steam here as price responds to confluence downtrend support. From a trading standpoint, the threat for a larger recovery remains while above 1.2579.” Price registered a low at 1.2610 today before reversing sharply higher with price poised to mark an outside-day reversal in early US trade.

Loonie turned just ahead of the January lows in USD/CAD and keeps the yearly range in focus while above key confluence support at the 2018 yearly open / 78.6% Fibonacci retracement of 2017 advance at 1.2579-1.2619. Initial weekly resistance eyed at the low-week close at 1.2727 with a breach / weekly close above monthly open resistance at 1.2785 needed to mark a larger reversal. Key resistance / bearish invalidation steady at t the 2020 yearly open at 1.2975. A break lower from here would risk accelerated losses for the US Dollar with such a scenario exposing subsequent support objectives at the 2018 low-week close at 1.2421 and the 88.6% retracement at 1.2358.

Bottom line: The Canadian Dollar is consolidating within the yearly opening-range just above key technical support at 1.2579-1.2619. From a trading standpoint, a good zone for possible price inflection with the broader short-bias vulnerable while above. Be on the lookout for downside exhaustion head of this threshold with a breach / close above the monthly open at 1.2785 needed to suggest a more significant low is in place.

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