Weak but Bounce Risk Rising

Weak but Bounce Risk Rising

USD/CAD Technical Outlook

  • USD/CAD stuck in a pervasive downtrend
  • There is support running nearby that could induce a bounce

USD/CAD Technical Overview: Weak but Bounce Risk Rising

Just yesterday USD/CAD sank to a new cycle low since the 2020 peak, and while it is stuck in a pervasive downtrend it could be nearing a point where it might post another short-term low. Running below current levels is an underside trend-line that has been in play on several occasions since June.

Given the support level is running in the direction of the trend it isn’t viewed as a substantial level of support, but enough that short-term traders may want to be mindful as price nears. Overall, a bounce could quickly fail as all bounces thus far have.

Should USD/CAD pick up momentum beneath the underside trend-line, there isn’t substantial macro support until the 12247/12061 region. The lows from 2017 and 2018 would be considered a big test if met.

For now, from a tactical standpoint the picture is a little tricky for establishing new positions in either direction. For longs, the trend is still down and support doesn’t exactly offer a high amount of conviction.

For shorts, risk/reward isn’t appealing either as a bounce off support could be near, and looking at how new lows have been short-lived in the past, it adds further reservation to chasing USD/CAD lower.

USD Forecast

Recommended by Paul Robinson

Check out the USD Forecast

USD/CAD Daily Chart (bounce could be near)

usd/cad daily chart

USD/CAD Charts by TradingView

Resources for Forex Traders

Whether you are a new or experienced trader, we have several resources available to help you; indicator for tracking trader sentiment, quarterly trading forecasts, analytical and educational webinars held daily, trading guides to help you improve trading performance, and one specifically for those who are new to forex.

—Written by Paul Robinson, Market Analyst

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Originally Posted on: https://www.dailyfx.com/forex/technical/home/analysis/usd-cad/2021/03/17/USDCAD-Technical-Overview-Weak-but-Bounce-Risk-Rising-PRtech.html
By: Paul Robinson

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