Canadian Dollar Forecast: USD/CAD, EUR/CAD Price Ahead of CAD GDP Numbers
Canadian Dollar Outlook
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EUR/CAD, USD/CAD – Euro Continues Weakening
Since Sep 19 USD/CAD has been trading in a narrow range (near 100 pips) without any clear trend. The pair created a lower high then higher low so far. Additionally, the price has been fluctuating since Sep 23 between two trading zones - above and below 1.3256.
On the contrary, EUR/CAD peaked on Sep 19 then started a downside move. Today, the pair printed 1.4416 - its lowest level in nearly 30 months.
Alongside this, the Relative Strength Index (RSI) continues moving above and below 50 indicating that buyers do not have the momentum to lead the price higher, nor sellers are able to start a downtrend move.
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USD/CAD DAILY PRICE CHART (AUG 8, 2017 – OCT 1, 2019) Zoomed Out
USD/CAD DAILY PRICE CHART (April 16 – Oct 1, 2019) Zoomed In
From the daily chart, we notice, on Friday USD/CAD closed below 50- day moving average and the same happened yesterday. See trading signals generated by the 50-day MA on the chart (zoomed out).
Hence, USDCAD could be on its way for a test of the low end of the zone contingent on clearing the weekly support level underlined on the chart (zoomed in). See the chart to know more about the lower trading zone with the weekly support levels to consider in a further bearish move.
On the flip-side, another close above 1.3256 could mean more of the current sideways move. However, a close above the weekly resistance area 1.3310-18 could end this trendless move and cause a rally towards 1.3357. Further close above this level may push USDCAD even higher towards the vicinity of 1.3418-22.
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EUR/CAD DAILY PRICE CHART (Jan 3, 2017– Oct 1, 2019) Zoomed Out
EUR/CAD DAILY PRICE CHART (June 12 – Oct 1, 2019) Zoomed In
Looking at the daily chart, we notice yesterday EUR/CAD fell to a lower trading zone 1.4389 – 1.4476 eyeing a test of the low end of it.
Thus, a close below 1.4379 could send EURCAD towards the vicinity of 1.4318-08. Further close below 1.4308 may press the pair towards 1.4236. Nevertheless, the weekly support levels underlined on the chart (zoomed in) should be monitored.
That said, any failure in closing below the low end could reverse the pair’s direction sending it towards the high end of the zone. Further close above the high end could see EURCAD trading towards 1.4644. Although, the daily resistance area and levels marked on the chart should be watched along the way.
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Written By: Mahmoud Alkudsi
Please feel free to contact me on Twitter: @Malkudsi
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.