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USDCAD, The Bear has Returned!


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On 11/12/2021 at 20:24, YEW_Trade said:

USDCAD has been on an upward momentum for quite some time and now it’s losing steam. 
The Return of the Bear is Near! 

B3260272-5C22-4FCE-87EA-828F1F79B72B.png

Hi @YEW_Trade

Thanks for sharing your analysis on USDCAD.

USD/CAD may continue to retrace the decline from the monthly high (1.2854) ahead of the FOMC rate decision on December 15, but the recent reversal in retail sentiment looks poised to persist as the exchange rate trades within broad range in the second half of 2021.

image.png

The IG Client Sentiment report shows 64.72% of traders are currently net-long USD/CAD, with the ratio of traders long to short standing at 1.83 to 1.

 

USD/CAD RATE DAILY CHART

Image of USD/CAD rate daily chart

Source: Trading View

  • Keep in mind, USD/CAD cleared the January high (1.2881) in August as an inverse head-and-shoulders formation took shape, but the exchange rate failed to defend the July low (1.2303) in October as the Relative Strength Index (RSI) dipped below 30.
  • As a result, USD/CAD may continue to trade within a broad range as the recovery from the October low (1.2288) failed to produce a test of the September high (1.2896), with a textbook RSI sell signal taking shape in December as the oscillator fell back from overbought territory to push below 70.
  • However, lack of momentum to close below the 1.2620 (50% retracement) to 1.2650 (78.6% expansion) region may push USD/CAD back towards 1.2770 (38.2% expansion), with the next area of interest coming in around 1.2830 (38.2% retracement) to 1.2880 (61.8% expansion), which largely lines up with the monthly high (1.2854).
  • Need a break of the September high (1.2896) to bring the August high (1.2949) on the radar, with the next area of interest coming in around 1.2980 (61.8% retracement) to 1.3040 (50% expansion).

Written by David Song, Currency Strategist, DailyFX

 

All the best - MongiIG

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Canadian Dollar Technical Forecast: USD/CAD Retains a Bullish Profile Ahead of FOMC.

USD/CAD Forecast Ahead of the Canadian Inflation Data

 

USD/CAD WEEKLY OUTLOOK: BULLISH

  • USD/CAD has soared since late October, printing higher lows and higher highs on its journey north
  • Earlier this week, the price pulled back modestly, but has since rebounded after failing to break cluster support near the 1.2600 area
  • The near-term technical and fundamental bias for USD/CAD is positive

Full article by Written by Diego Colman, Contributor. DailyFX

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