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USDCAD TECHNICAL HIGHLIGHTS:
- USDCAD rise marked by grinding price action, may fail
- May fail, but still need to respect channel in the meantime
- Specific levels and lines to watch in the days ahead
USDCAD RISE MARKED BY GRINDING PRICE ACTION, MAY FAIL
The U.S. Dollar has been rallying against the Canadian Dollar since last month, but the rise in USDCAD hasn’t been particularly strong and has slowed even further in recent sessions. Sluggish price action suggests a break to the downside could soon be in the works.
But before jumping the gun on shorts, the near-term upward technical structure still remains in place and needs to be snapped before sellers can start to gain the upper hand. Watch for a break of the lower parallel and a lower-low to unfold under last week’s low at 13184 (4-hr chart). Should this happen then a larger decline could be in store.
The initial target on a breakdown clocks in at the 2012 trend-line and July low (just above 13000), which should be in near confluence at the time price would arrive (daily chart). A decline to that point would be a very important test. Not only is it a long-term trend-line, but a failure to hold could lead to a sharp sell-off similar to 2017 as the grind higher since that year fully gives way to selling (weekly chart).
On the top-side, if the USDCAD can continue to maintain the channel, or at the least maintain its higher-high, higher-low form, then the next major obstacle beyond 13344 is the trend-line running down off the 2016 peak.
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