USD/CAD Breaks Key Trendline Amid Its Worst Week Of The Year

USD/CAD suffered its most bearish week of the year on Friday, breaking the January 2018 trendline and signalling a longer-term reversal could be unfolding.

  • USD/CAD suffered its most bearish week of the year by Friday’s close, following weaker than expected earnings data within May’s NFP report.  
  • Prices appear stretched on the daily chart, so we’re hoping prices can retrace and consolidate below a resistance level before seeking a short setup.
  • We’re targeting the February lows, which is also near the 38.2% Fibonacci retracement level. If this level breaks, it confirms a long-term reversal on the weekly charts.
  • Whilst traders remain net-short the Canadian dollar futures market, their bearishness has been dwindling throughout the year which can of course happened ahead of a major reversal.

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