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Canadian Dollar Technical Analysis Overview: USD/CAD Consolidation Following Reversal

Canadian Dollar Technical Analysis Overview: USD/CAD Consolidation Following Reversal

Justin McQueen, Strategist

CAD Analysis and Talking Points

  • USD/CAD | Consolidation Following Reversal
  • CAD/JPY | Trend Support Underpins

USD/CAD | Consolidation Following Reversal

Since Friday’s rebound in USD/CAD, the pair has largely been in consolidation mode throughout the week and now tests support at 1.3225. That said, while a break below puts the pair at risk of dropping to 1.3160-80, the continued easing in trend indicators suggest that the pair may remain in consolidation. On the topside, USD/CAD gains in the near term look somewhat limited with resistance capping at 1.3270, while the 200DMA resides at 1.3276, therefore rallies offer attractive pullbacks. However, downside risks would likely ease back on a breach above 1.3290, whereby we would look for a retest of the 1.3330-45 zone.

SupportResistance
1.322538.2% Fib1.3276200DMA
1.321450DMA1.3345October Double Top
1.3158December low1.335561.8% Fib

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

Source: IG Charts

CAD/JPY | Trend Support Underpins

CADJPY remains underpinned by trend support, however, given the repeated failure to consolidate above 82.43 (38.2% Fib) we are somewhat cautious on the outlook for CAD/JPY. President Trump’s decision on whether he will delay the December 15th tariffs will be important for the cross, however, while a decision to delay tariffs would be positive, we view that gains are limited above to resistance at 82.80. On the downside, we see a risk of 81.30 on a firm close below trend support.

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

--- Written by Justin McQueen, Market Analyst

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

Follow Justin on Twitter @JMcQueenFX

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

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