Canadian Dollar Price Outlook:
- USD/CAD[1] has been in the midst of an intense sell-off over the past few weeks.
- After perching above the 1.4000 spot in late-May, sellers drove the pair lower by more than 730 pips down to last week’s low.
- Since last week’s low, a bit of recovery has shown – but a confluent zone of Fibonacci resistance has come into play that may thwart the continued advance.
From Range to Extreme Trends, Welcome to 2020
It’s been a strange first half of the year for the US Dollar[2], and a similar statement can be made for the Canadian Dollar[3], as well. When meshing the two currencies up in the USD[4]/CAD pair, it’s been a pretty bewildering outlay so far in 2020 trade.
After spending much of 2019 trade in varying forms of range, strength showed around the 2020 open with USD/CAD pushing up to fresh six-month-highs in late-February. A gap through the 1.3500 handle saw a bullish breakout really take-hold, and a potent combination of both USD-strength and CAD weakness led to a robust breakout in mid-March; with the pair coming a mere 21 pips away from the 17-year high. And what started as a pullback in that bullish theme soon turned into a range, as buyers apparently wanted no part of testing that very obvious, looming high watermark on the charts. That range began to take on a bearish bias, as looked at in the article Canadian Dollar Price Outlook: USD/CAD Battles the Big Figure 1.4000[5].
Descending triangles are interesting formations to work with[6] that will often be approached with a bearish bias. It consists of a horizontal level or zone of support coupled with a
