Canadian Dollar (CAD) is on its way to register considerable weekly gains against majority of its counterparts as the Bank of Canada Governor, Stephen Poloz, in his speech on Tuesday, suppressed chances that the central bank could go ahead with consecutive interest rate cuts in its monetary policy meeting on March 04. However, market players trimmed some of the early week profits during Thursday ahead of the Canadian CPI, scheduled for release at later part of the day.
Meanwhile, the following is a brief technical overview of EURCAD, CADJPY, AUDCAD and CADCHF pairs.
Irrespective of its recent decline, the EURCAD failed to break the 1.4050 – 1.4350 range. The pair is currently resting near 1.4120, with the 1.4050 being immediate support, breaking which the pair can test 1.3950 and a sustained break of 1.3950 could further weaken it towards testing 1.3800 mark which is likely act as a strong medium-term support. On the upside, 1.4180, 1.4230 and the 1.4300 are likely intermediate resistances before the pair tests the range resistance of 1.4350. On the break of 1.4350, the pair can immediately rally towards 2015 highs near 1.4485-90, breaking which chances of near-term decline could be negated.
Recent advance of CADJPY likely to be capped by the descending trend-line, connecting December 2014 highs, near 96.60 while the 23.6% Fibo of its December 2014 – January 2015 decline, near 95.20, and 94.00 psychological level, also including multiple support, can restrict near-term decline of the pair. Considering the comparative strength of the JPY, the pair is more likely to respect the downtrend than the otherwise and a break of 94.00 mark could provide further weakness to it towards testing yearly low near 91.70 with 93.00 being intermediate support. Alternatively, a break of 96.60 could fuel the pair’s up-move towards 97.40, encompassing 38.2% Fibo, and a sustained trading above 97.40 can be followed by the 99.10 – 99.30 crucial horizontal resistance, including 100-day SMA, 50% Fibo and previous supports. On the sustained break of 99.30, chances of near-term decline by the pairs gets negated and it can rally towards 101.50 resistance level.
Even if the AUDCAD failed to sustained 0.9850 break, strong support between 0.9730 – 0.9710, including 38.2% Fibonacci Retracement of its September – December 2014 decline, restricts further decline of the pair. If the pair weakens below 0.9710, it can test 0.9650 and 0.9590, 23.6% Fibo. Extended weakness of the pair, below 0.9590, could immediately being followed by the 0.9450 support before testing the 0.9390 lows. On the upside, a break of 0.9850 can fuel the pair’s rally towards 0.9890 – 0.9900 zone, including 200-day SMA and the 61.8% Fibo. Should the pair sustains the 0.9900 break, also surpassing 0.9930, it can easily cross the 1.0050 resistance level and can rally towards 1.0100 mark.
Ascending trend channel, coupled with the CHF weakness, continue supporting the CADCHF up-move; however, RSI reversal from the overbought zone could provide addition weakness to the pair towards testing support-line of the channel, near 0.7570, before reversing to 0.7650 resistance. On the break of 0.7650, the pair can rally towards the channel resistance, near 0.7750, which is likely restricting the near-term up-move of the pair. Should it gain enough of strength to break 0.7750, it can rally towards 0.7800 & 0.7960 resistance levels. On the downside, a break of 0.7570 calls for the pair to test 0.7480 support before plunging to 0.7360 and the 0.7300 supports. An extended below 0.7300 negates the chances of near-term up-move by the pair and can make it vulnerable to test 0.7100 mark.
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