Canadian Dollar Forecast: AUD/CAD, CAD/CHF Nearing Key Levels

Canadian Dollar, AUD/CAD, CAD/CHF - Talking Points

• Rising crude oil prices breathing life into Canadian Dollar
• AUD/CAD bulls winning fight against oil-boosted CAD
• CAD/CHF nearing a breakout on upper bound of triangle?

The Canadian Dollar is seeing inflows on rising crude oil prices this week. WTI prices are over 26% higher for November. Overall improvements in market sentiment on vaccine headlines have boosted the commodity as the economic outlook cleared. The lift in energy prices is well reflected across oil-sensitive Canadian Dollar currency pairs.

AUD/CAD Outlook:

The Australian Dollar continues to gain against the Canadian Dollar despite the rise in WTI. The move higher is partly explained by the risk-sensitive Aussie, reflecting current upbeat market sentiment amid Covid vaccine headlines and improving economic outlook prospects.

AUD/CAD recently saw a bullish technical signal form with the 20-day Moving Average (MA) crossing above its 50-day one. The pair has now cleared the October closing high and is aiming to test the lower end of a resistance range seen from July to September of this year. However, previously tested trendline resistance from the 2018 swing high may challenge further movement to the upside.

AUD/CAD Daily Price Chart

Chart created with TradingView

CAD/CHF Outlook:

The Canadian Dollar is faring much better against the anti-risk Swiss Franc. Unlike the Aussie, safe-haven outflows from the Franc appear to be having a bullish impact on CAD/CHF as traders unwind safety-linked assets. The compounding effect from the risk-on mood and rising oil prices will likely be a short-to-mid-term boon for the pair.

Earlier this month, CAD/CHF climbed above its 200-day MA. Now, with the 50-day MA on the move higher, a Golden-Cross appears to be nearing formation. The pair has also been trading within a Symmetrical Triangle and is approaching the upper range of the pattern. A move higher would likely signal a breakout and bolster bullishness.

CAD/CHF Daily Price Chart

Chart Created with TradingView

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--- Written by Thomas Westwater, Analyst for DailyFX.com

To contact Thomas, use the comments section below or @FxWestwater on Twitter