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Canadian Dollar Technical Analysis Overview: USD/CAD Awaits Breakout

Canadian Dollar Technical Analysis Overview: USD/CAD Awaits Breakout

2019-11-06 10:30:00
Justin McQueen, Analyst
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CAD Analysis and Talking Points

  • USD/CAD | Awaits Breakout
  • CAD/JPY | Upside Stalls, However, Dips are to be Well Supported

USD/CAD | Awaits Breakout

Since the reversal stemming from the dovish tilt in the most recent BoC monetary policy meeting, further upside in USD/CAD has been capped by 100DMA, situated at 1.3193. Momentum indicators continue to point towards a slight bullish bias, however, this has eased in recent sessions and thus reflects a lack of buying momentum. Alongside this, the strength of the trend (ADX) has also waned, which implies to us that USD/CAD is in a consolidation phase in the short-term as it awaits a breakout from its 1.3120-1.3200 range. In terms of a catalyst for a potential breakout, this may come in the form of Friday’s labour market report.

USD/CAD Price Chart: Daily Time Frame (May 2019 – Nov 2019)

Canadian Dollar Technical Analysis Overview: USD/CAD Awaits Breakout

Source: IG Charts

USD/CAD DMIs and ADX (Jun 2019Nov 2019)

Canadian Dollar Technical Analysis Overview: USD/CAD Awaits Breakout

Source: Refinitiv

CAD/JPY | Upside Stalls, However, Dips are to be Well Supported

After three daily session of gains, upside in CAD/JPY is beginning to stall after failing to hold above the 83.00 handle, which in turn raises the risk of a pullback in the cross. However, dips are likely to remain well supported with the 200DMA at 82.13, ahead of last week’s low at 81.89. Alongside this, a cluster of DMAs reside at 81.62 (50DMA) and 81.54 (100DMA) to limit possible downside.

CAD/JPY Price Chart: Daily Time Frame (Aug 2018 Nov 2019)

Canadian Dollar Technical Analysis Overview: USD/CAD Awaits Breakout

--- Written by Justin McQueen, Market Analyst

To contact Justin, email him at Justin.mcqueen@ig.com

Follow Justin on Twitter @JMcQueenFX

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