Recent advance in Crude Oil, Canada’s main export, coupled with improved inflation readings helped the Canadian Dollar (CAD) to register considerable gains against majority of its counterparts; however, the Loonie, as it is nicknamed, observed lackluster trading against its Japanese counterpart while weakening against the Euro. Considering the lack of major economic readings from Canada, during the current week, prices of Crude oil and the US readings are likely become helpful to foresee near-term CAD moves.
Also Read: US Dollar Might Extend The Corrective Move
Given the brief update, the following is a technical overview concerning USDCAD, EURCAD, GBPCAD and CADJPY.
USDCAD re-tests the 50-day SMA support for the first time since November 2014 and signals the downtrend to continue towards testing 1.2350 horizontal support, closely followed by the 1.2300 psychological support that also includes 23.6% Fibonacci Retracement of its July 2014 to recent highs. Given the pair’s ability to break 1.2300 mark, which seems less likely, it could immediately plunge to 1.2100 mark prior to testing 38.2% Fibo and 100-day SMA support, near 1.2000 – 1.1995 zone. On the upside, 1.2570, followed by the 1.2650, are likely immediate resistances for the pair, breaking which it can challenge recent highs near 1.2830. Moreover, a sustained break of 1.2830 could fuel the pair’s rally towards 1.3000 psychological magnet which also encompasses multiple resistance.
Sustained up-move, backed by rising RSI and improved EUR, pushes the EURCAD towards breaking its 23.6% Fibonacci Retracement of its December 2014 to March 2015. The pair seems testing its 1.3800 horizontal mark soon; however, a sustained break of 1.3800 is less likely and it can pullback it to re-test 1.3600 mark before testing 1.3510 and the March low of 1.3390. On the consecutive decline below 1.3390, the descending trend-line, connecting multiple lows marked in 2014, could restrict further decline of the pair near 1.3350. On the successful break of 1.3800, the pair could rally towards testing 1.3950 and 1.4020 before advancing to 1.4130 mark.
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GBPCAD maintained its decline since the late February and is on the verge of testing 50% Fibonacci Retracement of its November 2014 to February 2015 up-move, near 1.8550, quickly followed by the 1.8520 important horizontal support. However, oversold RSI and the expected weakness of CAD could become reasons for the pair to refrain from breaking 1.8520 and reverse back to 1.8750 and 1.8900 resistance levels. Moreover, a break of 1.9000 mark could fuel the pair towards 1.9150 mark that is likely restricting near-term advance of the pair. Alternatively, a break of 1.8520 can make the pair vulnerable to plunge towards 1.8300 mark, that encompasses 200-day SMA and 61.8% Fibo, while there are multiple supports near 1.8200 mark to make the pair’s trading range bound.
CADJPY continue struggling between 50-day SMA and the 23..6% Fibonacci Retracement of its December – January decline; however, the slow rise in the pair, as depicted in rising RSI, could become a reason for it to test 96.50 resistance before testing 38.2% Fibo, near 97.30. Moreover, a break of 97.30 could accelerate the pair’s up-move towards 99.00 psychological mark, also including 50% Fibo. On the sustained break of 99.00, the pair could rally to 61.8% Fibo, 100.80 mark, before testing 101.50. On the downside, 95.00, 94.30 and the 93.50 are likely immediate supports for the pair before it declines to 2015 lows near 91.70. Further, on the break of 91.70, the 90.50 and the 89.50 are likely to restrict additional downside of the pair.
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