- USD shorts lighten up ahead of the extended weekend.
- USD/CAD creates bullish outside day candle.
The greenback has witnessed a relief rally of sorts, seemingly due to shorts lightning up ahead of the extended weekend in the US (President's Day on Monday).
Further, demand for the CAD weakened after data released earlier today showed the Canadian manufacturing sales fell -0.3%m/m in December against market expectations of a +0.2% rise (prior: +3.8%). The core component also registered a drop of 0.4%.
Consequently, the USD/CAD pair has strengthened0.55 percent and was last seen trading at 1.2560 (50-day MA). More importantly, the today's high and low (1.2560, 1.2450) engulfing Thursday's price action, meaning the pair has created a bullish outside day candle.
A positive follow-through on Monday would add credence to the bullish outside day candle and signal a temporary low has been made at 1.2450 (today's low).
That said, the one-month 25 delta risk reversals show the USD call bias and CAD put bias has weakened. A week ago the risk reversal gauge stood at 0.25, while as of writing, it is at 0.05. A call gives the holder the right to buy at a set price, while the put gives the option holder the right to sell at a set price.
USD/CAD Technical Levels
A break above 1.2616 (100-day MA) would open up upside towards 1.2537 (Feb. 14 high) and 1.2689 (Feb. 9 high). On the other hand, a daily close below 1.2450 (today's low) could yield a re-test of the recent lows around 1.2250. A violation there would expose next major support at 1.2061 (Sep. 8 low).
|TREND INDEX||OB/OS INDEX||VOLATILY INDEX|
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these securities. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Forex involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.