USD/CAD Rejects Daily 50% Fibonacci Level

The action in the USD/CAD has been hot and heavy today, featuring the rejection of a key Fibonacci support level. A suddenly-strong WTI crude oil market and robust ISM Non-Manufacturing PMI (August) have played leading roles in short-term price action. For the time being, it appears the Loonie is content to settle somewhere between 1.3200 and 1.3250.

Friday’s economic calendar is jam-packed and will likely bring more volatility to the USD/CAD. Here is a quick look at the slate:

Country                   Event

U.S.                         Average Hourly Earnings (August)

U.S.                         Non-Farm Payrolls (August)

Canada                   Unemployment Rate (August)

Canada                   Net Change In Employment (August)

These events are scheduled for release at 8:30 AM EST. In addition, FED Chairman Jerome Powell is due to speak at 12:30 PM EST, which always has the potential to shake things up. Factor in an active WTI market and the USD/CAD may be positioned to revisit today’s area of Fibonacci support.

50% Fibonacci Retracement Checks Bearish Trend In The USD/CAD

In a Live Market Update from yesterday, I issued a long trade recommendation from Fibonacci support. The play proved to be a winner, producing 30 pips profit. So, is this key level going to hold or are we headed lower?

Here are the levels to watch as we roll toward Friday’s session:

• Resistance(1): Bollinger MP, 1.3280
• Resistance(2): Daily SMA, 1.3295
• Support(1): Macro Wave 50% Fibonacci Retracement, 1.3198

Overview: Going into the weekend break, price action in the USD/CAD is going to be all about news and crude oil. While it is tempting to hold position longs from the 50% Fibonacci level, the risk is enhanced due to the news cycle. Ultimately, it may be better to take a wait-and-see approach during tomorrow’s pre-market news releases and build a plan from there. 

In any case, be sure to stay tuned to FX Leaders for what is sure to be an active Friday for the Loonie.

ABOUT THE AUTHOR See More

Shain Vernier

US Analyst

Shain Vernier has spent over 7 years in the market as a professional futures, options and forex trader. He holds a B.Sc. in Business Finance from the University of Montana. Shain's career includes stretches with several proprietary trading firms in addition to actively managing his own accounts. Before joining FX Leaders, he worked as a market analyst and financial writer.

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