Trying to Find Footing After Swift Reversal

USD/CAD Technical Outlook

  • USD/CAD declining into big support
  • Could help bring clarity, but price is still stuck in a big-picture wedge

USD/CAD Technical Outlook: Trying to Find Footing After Swift Reversal

USD/CAD attempted to stay above the 200-day moving average, but was swatted down hard after trying to further cross the underside of a trend-line dating to the June 2021 low. The outlook at the moment is murky, but we do have defined top and bottom-side levels to pay close attention to.

The rise off the low began after taking out the yearly low and then reversing sharply higher. The fact that it held on a daily closing basis with a volatile turnaround continues to give validity to the yearly low at 12450.

The ultimate low of the move was 12402, which if breached will have USD/CAD looking at the low from October at 12288 and a trend-line from 2015. That would be a big spot to see USD/CAD to trade, but a bit of a distance from current levels to worry about now.

On the top-side the rejection from over the 200-day at the June 2021 trend-line has yesterday’s high at 12676 in focus as the next big hurdle to watch. A crossing of that level would put USD/CAD in position to continue further towards the 12900/50 area.

The thinking right now is that we may see USD/CAD bobble around sideways between the aforementioned levels before any meaningful move develops. Trading off these levels with a mean reversion approach may be the best stance for the time being.

USD/CAD Daily Chart

USD/CAD Chart by TradingView

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—Written by Paul Robinson, Market Analyst

You can follow Paul on Twitter at @PaulRobinsonFX

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