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Canadian Dollar Analysis, Will Momentum Continue? USD/CAD, GBP/CAD, CAD/JPY

Canadian Dollar Analysis, Will Momentum Continue? USD/CAD, GBP/CAD, CAD/JPY

Daniel Dubrovsky, Contributor

Canadian Dollar, USD/CAD, GBP/CAD, CAD/JPY – Technical Analysis

  • USD/CAD downtrend continuing at slow and steady pace
  • GBP/CAD ready for a next near-term move to the upside?
  • CAD/JPY eyeing a pivotal support zone after recent losses
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USD/CAD Technical Outlook

USD/CAD continues to trade in a consolidative state, albeit with a slight downside bias. Falling resistance from November seems to be guiding the pair lower, with the 100-day Simple Moving Average sitting right above. The Canadian Dollar is mostly little changed from where it was in late February against the US Dollar. Now, USD/CAD is testing the key 1.2468 inflection point.

A break lower would expose the 1.2365 – 1.2401 support zone which could open the door to a turn higher back towards falling resistance. Keep a close eye on RSI as positive divergence is a sign of fading downside momentum. A meaningful break above the trendline and SMA could open the door to a broader reversal towards 1.2738. Otherwise, clearing lows from March would further expose the bottom from 2018 at 1.2250.

USD/CAD Mixed
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily 2% -11% -6%
Weekly -34% 34% -7%
What does this mean for the USDCAD outlook?
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USD/CAD- Daily Chart

Chart Created in TradingView

GBP/CAD Technical Outlook

GBP/CAD could be readying to extend recent gains, but it will remain to be seen if this could translate into a meaningful turnaround of what has been sideways price action since June 2016. The British Pound just took out near-term falling resistance from February – red lines on the chart below. On top of that, the 1.7411 – 1.7458 resistance zone was also pierced through.

That has exposed a wide range of resistance between 1.7675 – 1.7798, which was established a little over a year ago. The pair was unable to breach this area when prices tested it in February, solidifying this important technical barrier. Beyond that is the 2020 peak, another wide zone between 1.7918 – 1.8053. On the other hand, a drop back under the former 1.7458 – 1.7411 resistance zone may open the door to facing March lows.

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GBP/CAD- Daily Chart

Chart Created in TradingView

CAD/JPY Technical Outlook

CAD/JPY could be at a turning point after the Canadian Dollar weakened against the Japanese Yen following 2 weeks of price action. Preceding this turn lower was the presence of negative RSI divergence, warning that upside momentum was fading. The pair is now sitting at the 86.079 – 86.505 support zone, where a bounce could open the door to revisiting the 88.082 – 88.306 resistance zone.

Still, prices remain under the 20-day SMA, a near-term bearish signal. The 50-day SMA is slowly creeping higher and could come into play should prices extend recent losses. The former is helping to maintain the dominant uptrend in CAD/JPY. Falling under it exposes the 84.44 – 84.74 inflection zone. Rising above March peaks opens the door to testing the October 2018 high.

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CAD/JPY- Daily Chart

Chart Created in TradingView

--- Written by Daniel Dubrovsky, Strategist for DailyFX.com

To contact Daniel, use the comments section below or @ddubrovskyFX on Twitter

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

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