Canadian Dollar Forecast: USD/CAD, CAD/JPY Key Levels to Watch
- USD/CAD | More of the Same for USD/CAD, BoC Gears Up for Tapering
- CAD/JPY Beginning to Look Constructive
More of the Same for USD/CAD, BoC Gears Up for Tapering
USD/CAD: A convincing rejection of the 1.26 handle, which also coincided with the 50% fib of the 2021 range. A softer USD and a push higher in oil prices have allowed for USD/CAD to trade back below the 1.25 handle. However, trend indicators suggest that the pair are likely to remain in a range in the short run. Keep in mind that the BoC will release its latest MPR next week and given that markets have in part priced in the fact that the central bank is gearing towards tapering asset purchases this reinforces the range trading view. The risk, however, is if the BoC adopt a more cautious stance in light of rising virus cases and subsequent renewed restrictive measures. That being said, support resides at 1.2465-75, which is protecting the YTD lows thus far, while on the topside, rallies have been capped at 1.2625-35.
USD/CAD Chart: Daily Time Frame
CAD/JPY is beginning to look rather constructive as the cross continues to build on a series of lower lows. A break above near term resistance at 87.60 in focus for a push towards 88+. However, should trendline support give way this raises the risk that a short-term top may be in place for the cross, which could see a move below 86.00 in quick fashion.
CAD/JPY Chart: Daily Time Frame
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