Canadian Dollar Forecast: USD/CAD, NZD/CAD, CAD/JPY and GBP/CAD
Canadian Dollar Technical Forecast
- The Canadian Dollar may be on verge of ending consolidation vs USD
- NZD/CAD could reverse lower after taking out October rising support
- CAD/JPY may turn lower on fading momentum, GBP/CAD to rise next?
USD/CAD Technical Outlook
The Canadian Dollar may be on the verge of extending its advance against the US Dollar and ending prolonged consolidation since the Summer of 2019. USD/CAD took out lows from July after clearing support at 1.3017, but follow-through has been somewhat lacking. Clearing immediate support at 1.2952 may open the door to revisiting levels from the latter half of 2018. Otherwise, a daily close above 1.3036 places the focus on potential falling resistance from the beginning of December.
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USD/CAD Daily Chart
The Canadian Dollar also made progress against the New Zealand Dollar. NZD/CAD took out key rising support from the end of October in the aftermath of a Bearish Engulfing candlestick pattern. This has opened the door to reversing the dominant uptrend with immediate support at 0.8615 followed by 0.8503. Something to keep in mind is that the pair did push through falling resistance from March in late 2019 – blue lines on the chart below. That may keep the medium-term trajectory bullish after near-term losses.
NZD/CAD Daily Chart
CAD/JPY Technical Outlook
Against the Japanese Yen however, the Canadian Dollar could be vulnerable. Negative RSI divergence emerged after a failed breakout attempt in CAD/JPY through the psychological barrier between 83.55 to 83.91. That shows fading upside momentum which can at times precede a turn lower or translate into consolidation. A defining downtrend could be in the cards if prices manage to take out rising support from August – red lines on the chart below. Otherwise, pushing through 83.91 exposes the April high at 84.35 and then 85.23.
CAD/JPY Daily Chart
GBP/CAD Technical Outlook
Versus the British Pound, the Canadian Dollar remains in cautious consolidation between 1.6990 and 1.7270. This followed what ended up being a false upside breakout through the March 2018 trend line as the psychological barrier between 1.7698 and 1.7795 held, see chart below. The fall through near-term rising support from October offers a cautious near-term bearish bias. We do have positive RSI divergence as prices attempted clearing immediate support, showing fading downside momentum. That may precede a turn higher.
GBP/CAD Daily Chart
--- Written by Daniel Dubrovsky, Currency Analyst for DailyFX.com
To contact Daniel, use the comments section below or @ddubrovskyFX on Twitter
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