The Canadian Dollar[1] has continued to trade within the confines of the initial August opening range with news that a working US-Mexico trade deal has been negotiated sending USD/CAD to the monthly lows today in New York trade. Here are the updated targets and invalidation levels that matter on the USD/CAD charts this week. Review this week’s Strategy Webinar[2] for an in-depth breakdown of this setup and more.
USD/CAD Daily Price Chart
Technical Outlook: USD/CAD is testing key confluence support today 1.2951/68 – a region defined by the monthly opening range low, the 100% extension of the decline off the yearly high, the 38.2% retracement of the 2018 range and 61.8% parallel of the ascending pitchfork extending off the yearly lows.
A daily close below this level is needed to fuel the next leg lower in price with such a scenario targeting 1.2880 backed by a key confluence at ~1.2840s where the lower parallel converges on the 200-day moving average and channel support. Daily resistance stands at the 1.31-handle with broader bearish invalidation at 1.3165.
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USD/CAD 240min Price Chart
Notes: A closer look at USD/CAD price action further highlights this support zone- the immediate decline is at risk while above this threshold but the broader focus remains lower while within this descending pitchfork formation[4]. Look for initial resistance at the median-line backed by 1.3067 and 1.31.
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