- USD/CAD bulls defending daily suppport structure, eyes on monthly resistance.
- CFTC data is increasingly bullish for CAD and 4-hour resistance is critical.
USD/CAD is a compelling technical picture considering harmony with a bullish outlook and trimming on net long CAD positioning.
While CAD net long positions edged higher, they have essentially consolidated in the past three weeks given the trimming since the start of last month, falling from 16K+ (01/02) to 9,132 on (22/02).
This gives rise to prospects of further weakness in spot CAD.
The following is a top-down analysis that illustrates where the next opportunity could arise from a swing trading perspective.
Monthly chart
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The monthly chart is yet to test old support.
Weekly chart
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The weekly chart shows that there could be the formation of a reverse head and shoulders which is a bullish pattern and would coincide with a monthly test of old support.
Daily chart
-637503073064295316.png)
The daily chart offers a similar outlook with the price having already made a 50% mean reversion of the prior bullish impulse to a confluence of structure.
4-hour chart
-637503073418798760.png)
Meanwhile, the 4-hour chart is yet to develop a bullish structure. Old support is expected to act as resistance.
However, a break of resistance and a restest of the structure with a subsequent continuation would likely equate to a fresh daily bullish impulse and continuation to test monthly resistance.
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