Canadian Dollar Technical Analysis Overview: USD/CAD Eyes Key Support
CAD Analysis and Talking Points
USD/CAD | BoC to Dictate Near Term Outlook
Eyes on the Bank of Canada rate decision in which expectations are for the central bank to stand pat on monetary policy. Therefore, the focus will be placed on any changes in rhetoric within the accompanying statement. Given that money market pricing for January cut is at 26%, the bar is relatively low for a dovish surprise. As it stands, the implied move, derived from 1-day options is at 54pips. On the technical front, DMI indicators continue to tilt towards a bullish bias, however, this has eased slightly in recent sessions. As such, USDCAD is testing support at the 200DMA (1.3279), whereby a break below raises the risk of a test of 1.3250. That said, in the event of a dovish surprise, topside resistance at 1.3325 is likely to be challenged with a break opening the doors for a test of 1.3335.
Implied Daily Range (1.3225-1.3340)
Nov 20th High
Nov 22nd low
October Double Top
USD/CAD Price Chart: Daily Time Frame (Apr 2019 – Dec 2019)
Source: IG Charts
USD/CAD DMIs and ADX (Dec 2018 – Dec 2019)
CAD/JPY | Testing Key Support
CADJPY has yet again bounced off the 100DMA situated at 81.48. However, with both the 200DMA and 50DMA residing at 81.99 and 82.07, gains in the cross may be somewhat limited. Alongside this, given the series of lower highs, risks remain tilted to the downside in the longer-term outlook.
CAD/JPY Price Chart: Daily Time Frame (May 2019 – Nov 2019)
--- Written by Justin McQueen, Market Analyst
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