Testing Year-Long Support
The Canadian Dollar Futures (6C) weekly chart shows price action testing a multi-year support level around 0.72065. This level has proven to be a strong floor over the past year, repeatedly holding the price above it and triggering reversals back toward higher levels. The upcoming US election is only hours away, and it could trigger huge volatility in all financial markets, which could send the Canadian dollar below this level. It will all come down to whichever presidential candidate, Donald Trump or Kamal Harris, wins and what the market views as bullish or bearish for the Dollar.
Target Zone
The first logical target for a bounce from this support would be the 0.73576 – 0.73837 zone, where the 50-week SMA and a prior consolidation range intersect.
Probable Scenario:
- Bounce Potential: Buyers entering at this support level could look for a move toward the target zone near 0.73837, in line with the 50-week SMA.
- Entry Consideration: Await bullish confirmation in the form of a reversal candlestick pattern (e.g., hammer or bullish engulfing) to confirm buyers are defending the level.
Summary & Trade Outlook
- Short Term (Days to Weeks): Monitor for a bullish reversal around 0.72065. Confirmation from candlestick patterns or increased buying volume can strengthen the case for a long entry.
- Medium Term (Weeks): A successful bounce could see the price approaching the target zone of 0.73576 – 0.73837, offering a solid potential for profit-taking.
- Long Term (Months): A hold above this year-long support suggests a sustained floor, and if maintained, could contribute to broader recovery potential in Canadian Dollar Futures.
Key Takeaway: High-Probability Long Setup
With the Canadian Dollar Futures testing a year-long support level, long trades offer a high-probability setup at current levels. This support has proven resilient over the past year, and a bounce here could yield a significant upside toward the 0.73837 target zone. For those eyeing long entries, patience is key — wait for bullish confirmation to capitalize on this established support.
