Technical analysis of the Canadian dollar » November 11, 2024
The USD/CAD pair ended a five-week winning streak in forex, with November’s opening range now set to cross the line after the US election. Battle lines drawn on the weekly technical chart.
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- USD/CAD Ends Five-Week Gaining Streak – Trump Election Rally Closes Weekly Low Well Below.
- November Opening Range Breakout in Focus – US Inflation Data Pending.
- Resistance 1.3984/90 (key), 1.4115, 1.4189 – Support ~1.3820, 1.3753/73 (key), 1.3611/53
The US dollar ended a five-week streak of gains against the Canadian dollar on Friday with the USD/CAD pair down just 0.3% despite a weekly range of 1%. The midweek election rally takes price back above a key pivot zone, with the November opening range now set just above uptrend support.
Canadian Dollar Price Chart – Weekly USD/CAD
Perspectives techniques
In my latest Canadian Dollar technical forecast, we noted that the USD/CAD pair was approaching key technical resistance, “in the 1.39 area and the focus is on a weekly close above this threshold. From a trading perspective, a good area to reduce long exposure portions/increase protective stops – losses should be limited to 1.3745 IF price heads higher on this timeframe with a close at Above this pivot zone needed to keep focus on a rally towards 1.3990 – an area of interest for possible top exhaustion/price inflection if reached. »
The USD/CAD pair climbed later in the week with a close above the 1.39 threshold fading into uptrend resistance. The price was on the defensive early this week with the midline making up for intra-weekly losses. The US dollar’s post-election rally fueled a reversal of more than 0.9% with the price set to close the week above the pivot zone of 1.3881/99 – a region defined by the 2022 high and the April summit.
Note that the November opening range is now defined by this week’s candle, with key resistance still within reach, just above the close of the March 2020 reversal / 100% extension of the advance from 2023 to 1.3984/99 – expect a bigger reaction at this level if it is reached.
Support rests along the midline and is supported by the 38.2% retracement of the September rally/close of the April high at 1.3753/73. A break/close below this threshold would be necessary to suggest a larger high has been recorded with key support/broader bullish invalidation at 1.3612/53 – a region defined by the 52-week moving average, the 61.8% Fibonacci retracement and the close of the 2023 top week.
A break/close above the 75% parallel would be necessary to mark the resumption of the uptrend towards subsequent resistance targets at the 2016 high at 1.4115 and the 100% extension of the December rally to 1.4115. 4189 – two levels of interest for possible top exhaustion/price inflection if reached.
Conclusion
The USD/CAD pair has broken through a major pivot zone with the monthly opening range now set just above slope support – wait for the breakout. From a trading perspective, losses should be limited to the weekly low if price heads higher on this streak with a break/close above 1.3990 needed to fuel the next major leg of the increase.
By Michael Boutros, Senior Technical Strategist, FOREX.com » Official Website
Michael Boutros has over 20 years of experience in forex, commodities and stock indices. For nearly two decades, Michael has worked on numerous FX trading desks, brokers and market news websites, including Gain Capital, MG Financial, ForexNews.com, Velocity Trade, FXCM, IG and nearly twelve years at DailyFX. He has also been quoted by numerous financial publications, including Reuters, Wall St Journal, CNBC, Bloomberg and KITCO.
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