Improvements in Canadian economic numbers fuelled the CAD strength during later last week, and during the early weekdays; however, decline in Crude Oil prices, main export earner for Canada, caused considerable weakness into the Canadian Dollar on Wednesday. Although there are no major economic releases, scheduled during the rest of the week from Canada, market players will watch Canadian Retail Sales, scheduled for Friday release, to determine near-term CAD moves.
Meanwhile, the following is a brief technical overview of EURCAD, CADJPY, AUDCAD and CADCHF.
On Wednesday, the EURCAD turned back from symmetrical triangle support, near 1.4100 – 1.4090 and broke above its resistance line, signaling an up-move, during early Thursday. Should the pair closes above 1.4245- 50, it can rally towards 1.4340 resistance level before extending its up-move to 2015 high, near 1.4485. A break of 1.4485 could further support the pair in progressing upwards to 1.4600 mark. Alternatively, a close below 1.4240 can be followed by the 1.4170 support level and the 1.4100 – 1.4090 support zone. Given the pair’s decline below 1.4090 on a closing basis, it can test 1.3950 and 1.3880 soon.
CADJPY continue trading between 23.6% Fibonacci Retracement Level of December 2014 – January 2015 decline. Should it gain further momentum, 96.40 and the descending trend-line, coupled with the 50-day EMA and 38.2% Fibo level, provides strong resistance to the pair’s up-move near 97.30. ON the break of 97.30, the pair can easily rally towards 98.60 and the 50% Fibo level, near the psychological mark of 99.10, breaking which chances of near-term decline by the pair can be denied. On the downside, 94.30, 93.50 and the yearly low of 91.70 can are likely supports for the pair before it extends its decline to psychological magnet of 90.00. Moreover, a sustained break of 90.00 can force the pair to test 88.00 support range in a quick decline.
100-day SMA and the 38.2% Fibonacci Retracement of September – December 2014 decline of the pair seems restricting the AUDCAD movement at present. Where the 0.9800 level, 50% Fibo, providing immediate upside resistance to the pair, the downside support remains near 0.9650. Considering the CAD strength as compared to the AUD and the broader bearish formation, the pair is more likely to trade downwards than the otherwise if it sustains the break of 0.9650. On the break of 0.9650, the 0.9590 and the 0.9530 are likely immediate supports for the pair before it plunges to sub 0.9400 mark. However, a break of 0.9800 can trigger pair’s up-move towards testing 0.9910 and 0.9970 resistance levels. A break of 0.9970 may provide enough of strength for the pair to surpass 1.0100 mark.
Even if the ascending trend channel continue supporting the CADCHF up-move, the ascending trend-line resistance, near 0.7625, is likely to restrict immediate upside of movement of the pair. Moreover, the overbought levels of RSI also likely to provide additional reason for the pair to limit its up-move. On the downside, 0.7510, 0.7490 and the 0.7450 are likely important support levels for the pair. Should it break the channel support line, near 0.7450, it can plunge to 0.7285. Alternatively, a break of 0.7625 can immediately be followed by the 0.7655 resistance before testing the upper line of the channel near 0.7830 mark. Should the pair sustains closing above 0.7830, it can rally towards its pre-slump price range surpassing 0.8450 mark.
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