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Canadian Dollar Forecast: USD/CAD, CAD/JPY Levels to Watch

Canadian Dollar Forecast: USD/CAD, CAD/JPY Levels to Watch

Justin McQueen, Strategist

USD/CAD, CAD/JPY Analysis & News

  • USD/CAD Directionless, Ebb and Flow of Risk Sentiment to Dictate Pair
  • CAD/JPY Vaccine Spike Retraced
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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

Canadian Dollar Forecast: USD/CAD, CAD/JPY Levels to Watch

Source: Refinitiv

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

Canadian Dollar Forecast: USD/CAD, CAD/JPY Levels to Watch

Source: Refinitiv

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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