USD/CAD : Bottom Out ?

(Tue, 23 Mar 2021). The Canadian Dollar is virtually unchanged against the US Dollar into the start of the week as range conditions grip the USD majors. An outside-day reversal off downtrend support post-FOMC last week has lost steam in the middle of the March range. The threat of a larger recovery remains in the days ahead but all within the confines of the broader June decline- we need some volatility to stir things up a bit. 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 my last Canadian Dollar Weekly Price Outlook we noted that USD/CAD had, “failed a break below a critical support confluence we’ve been tracking for months now and leaves the bears vulnerable while above.” The level in focus was 1.2579-1.2619 – a region defined by the 2018 yearly open and the 78.6% Fibonacci retracement of 2017 advance. A decisive break on March 11th fueled a decline of nearly 3% off the monthly highs before rebounding sharply on the heels of the Fed rate decision last week. Was that rebound off downtrend support a more significant low?

Initial weekly support remains with the 2018 low-week close at 1.2121 backed by the 88.6% retracement at 1.2358- a break / weekly close below this threshold is needed to mark resumption of the broader downtrend with such a scenario exposing the 2017 low-week close at 1.2156. Resistance now stands back at 1.2579-1.2919 – look for stronger inflection there IF reached with bearish invalidation lowered to the yearly high-week close at 1.2774.

Bottom line: The Canadian Dollar (USD/CAD) has rebounded off confluence downtrend support – the focus is on this recovery with a pivot above 1.2619 needed to suggest a more significant low was registered last week. From a trading standpoint, look for downside exhaustion ahead of 1.2421 on pullbacks IF price is indeed heading higher on this stretch. I’ll publish an updated latest Canadian Dollar Price Outlook once we get further clarity on the near-term USD/CAD technical trade levels.

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