Canadian Dollar Forecast: USD/CAD, CAD/JPY Levels to Watch
USD/CAD Directionless, Ebb and Flow of Risk Sentiment to Dictate Pair
USD/CAD: An overall subdued week thus for the pair, trading in one of its narrowest ranges of the year. Much like the rest of G10 FX, price action has been choppy. While retail sales has the potential to excite things, USD/CAD is likely to be driven by the ebb and flow of risk sentiment. That said, the pair is once again nearing weekly lows at 1.3030, where a break below puts the 1.3000 figure into focus. However, with a lack of upward momentum in both equities and oil prices, 1.3000 looks set to hold for now. On the topside, resistance is situated at 1.3100 where over 1yard ($1bln) of option expiries roll-off at the 10am NY cut, thus gains will likely be capped at the figure. Thus it is shaping up to be another rangebound session.
USD/CAD Short-Term Techs
CAD/JPY Vaccine Spike Retraced
CAD/JPY: As the vaccine driven spike has been retraced, the cross is now sitting back at the 50% fib, dips in CAD/JPY are likely to attract dip buyers. Short-term risks are apparent with renewed lockdown measures taking place in the US. However, markets have largely turned a blind eye with not only the recent optimism but also on the basis that major central banks will keep the purse strings loose for the foreseeable future. That said, should CAD/JPY fail to hold 79.29, support from 78.50 and 78.00 is likely to come into play.
CAD/JPY Short-Term Techs
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