USD/CAD Challenges Key Fibonacci Support Level
Shain Vernier • 1 min read
The Canadian dollar is extending monthly gains against the Greenback for the second consecutive session. WTI crude oil is up, U.S./China trade war tensions are back in the limelight, and the Bank of Canada is getting set to release its CPI metric on Friday. Is the USD/CAD preparing to enter long-term correction? The next 48 hours may give us some hints on how institutional money plans on betting the Loonie for the rest of 2018.
USD/CAD Technical Outlook
The vast majority of September has featured daily bearish domination in the USD/CAD. Rates have fallen almost 300 pips, posing a major challenge to the year’s bullish trend. At press time, traders are duking it out near the 38% Fibonacci retracement level of 2018’s range.
There are two key levels to keep track of for the remainder of the week:
- 2-Way Catalyst: 38% Yearly Retracement, 1.2950
- Support(1): Swing Low, 1.2887
Overview: 1.2950 is an important area to watch ahead of this Friday’s charged news cycle. As we covered earlier in the week, the U.S. economic calendar is wide open. However, Canada will release two primary market movers this Friday, the BoC CPI and Retail Sales. These events, coupled with an active crude oil market, are certain to test the mettle of USD/CAD bulls.
Today’s closing range is going to be instrumental in developing a plan for coming sessions. In the event the USD/CAD settles above 1.2950, then a position long may set up for Thursday. If not, the Loonie will likely challenge the Swing Low (1.2887) and officially enter corrective territory.