Canadian Dollar Technical Forecast: USD/CAD, CAD/JPY, EUR/CAD, NZD/CAD
- The near-term Canadian Dollar technical bias is cautiously higher
- USD/CAD may rise if prices confirm close above falling resistance
- CAD/JPY uptrend in focus, EUR/CAD and NZD/CAD eye support
Majors-Based Canadian Dollar Index, Weekly Wrap
Taking a look at a majors-based Canadian Dollar index, the Loonie made little progress this past week on the whole. The index of CAD averages it against the most-liquid currencies: the US Dollar, Japanese Yen, British Pound and Euro. Late in December, the currency pushed above near-term falling resistance which opened the door to a cautious upside tilt. Can this be emphasized ahead, especially with the Bank of Canada next?
USD/CAD Technical Outlook
If strength in the Canadian Dollar is to be found, that would mean downside progress in USD/CAD. On the daily chart below, that has been recently put into question. The currency pair pushed above near-term falling resistance from December. At this time however, upside confirmation is lacking. A close under 1.3017 could be a false breakout signal. Extending gains entails taking out the psychological barrier (1.3111 – 1.3134).
USD/CAD Daily Chart
USD/CAD Chart Created in TradingView
CAD/JPY Technical Outlook
The Canadian Dollar does look like it may have room to extend the dominant uptrend against the Japanese Yen. CAD/JPY took out and confirmed a push above key resistance (83.55 – 83.91). The pair struggled around the April 2019 high at 84.35. Taking it out would open the door to testing highs from March. Reversing the uptrend depends on whether the pair can fall through rising support from August – red parallel lines on the chart below.
CAD/JPY Daily Chart
CAD/JPY Chart Created in TradingView
EUR/CAD Technical Outlook
The Euro is being pressured against the Canadian Dollar. Falling resistance from the middle of December is pushing EUR/CAD to the downside. That leaves the currency pair facing key support which is a range between 1.4417 to 1.448. Taking it out exposes the 61.8 percent Fibonacci extension at 1.4383 followed by the 78.6% level at 1.4329. A confirmatory close above 1.4582 places the focus on targeting highs from November.
EUR/CAD Daily Chart
EUR/CAD Chart Created in TradingView
NZD/CADTechnical Outlook
The New Zealand Dollar is still at risk to losing ground against the Canadian Dollar. NZD/CAD closed under rising support from October in late December. Since then, prices have paused the near-term descent with support reinforced at 0.8602 to 0.8631. A daily close under this area opens the door to revisiting the psychological barrier between 0.8459 to 0.8503. Immediate resistance sits at 0.8704 and then 0.8800.
NZD/CAD Daily Chart
NZD/CAD Chart Created in TradingView
--- Written by Daniel Dubrovsky, Currency Analyst for DailyFX.com
To contact Daniel, use the comments section below or @ddubrovskyFX on Twitter
