Canadian dollar price prediction: USD / CAD, CAD / JPY, EUR / CAD

Canadian dollar, USD / CAD, CAD / JPY, EUR / CAD Points of contact:

A large and significant level of support came into play in USD / CAD a few weeks ago. I had emphasized this in an article about that inflectionas the pair had just bumped the 50% mark from a very long-term key move at 1.2622.

A few days later, that support turn had resulted in a formation of morning stars, often followed for the purpose of bullish reversals, and this was combined with a falling wedge that will be followed similarly with targets of bearish reversals. Since then, buyers have been in charge and have helped propel the pair to a new monthly high. But there may be another item of resistance that I’ll be looking at in the next chart.

To find out more about morning star formations, checking out Finance Prop Education

Price chart in USD / CAD over four hours

USDCAD price chart for four hours

Chart prepared by James Stanley; USDCAD on Tradingview

If you step back on the chart, there is another resistance item that came into play recently, and it will be marked with the red trendline on the chart below. This trend line stems from the March high and ties in with the swing highs of October and November. The projection of that trend line came into play last Thursday and continued again through Friday.

This may highlight another falling wedge, but this one is a longer term variety. If bulls can get through here, the next obvious spot on the chart is the same support / resistance zone around 1.2952-1.3000 that has been in play since around the opening in 2020.

To find out more about falling wedge formations, checking out Finance Prop Education

USD / CAD daily price chart

USDCAD Daily Price Chart

Chart prepared by James Stanley; USDCAD on Tradingview

Potential for a break – Look at the US dollar

The big question of whether the above scenario will result in another upside breakout will likely come from whether the US dollar can trigger its own bullish breakout. The potential is there at this point, with a few major events on the economic calendar, the key of which is Friday Release of non-farm payrolls, which is dropping at the same exact time as the Canadian jobs figures for the month of January are released (8:30 a.m. Eastern Time).

To find out more about head and shoulders patterns, checking out Finance Prop Education

US dollar eight hour price chart

US dollar eight hour price chart

Chart prepared by James Stanley; USD, DXY on Tradingview

CAD / JPY Ascending Triangle Breakthrough Potential Highlights

For those looking on the long side of the Canadian dollar, CAD / JPY may remain equally attractive. The pair continued to roll back from the covid-induced losses recorded earlier last year. So far about 76.4% of that movement has returned, and over time the pair has formed an ascending triangle formation.

Such formations are characterized by horizontal resistance to move with a rising trendline to help mark support. That trend line is shown in green below, and the horizontal resistance comes from the 23.6% retracement of the big step of 2007-2009.

Ascending triangle formations are often tracked for the purpose of bullish breakouts, looking for the horizontal resistance to eventually recede after an increasing frequency of tests supported by higher-layer support. This can keep the door open to bullish potential, and for those looking at CAD power scenarios, this could remain an attractive market to follow.

To find out more about the ascending triangle formation and how traders can approach it, checking out Finance Prop Education

CAD / JPY daily price chart

CADJPY Daily price chart

Chart prepared by James Stanley; CADJPY on Tradingview

EUR / CAD resistance from past support as sellers try to take over

Another area that can remain interesting for CAD bulls is EUR / CAD. The pair had entered the new year and held on to gains from the March peak. More recently, the euro has started to see a bit more sales as the potential for some action from the ECB appears to be increasing. Now this may not be easy to see against the US dollar, as the US currency has been extremely weak recently; but against the Canadian dollar, that tide may be more apparent, given that the pair has recently pushed to a new six-month low.

Last week saw a pullback in that sell-off and the price action fell back above a significant Fibonacci level at 1.5455. But resistance remains as derived from the 23.6% retracement from the early last year peak; and there is also the previous support trendline now shown as resistance.

This can keep the door open for short-side themes in the couple. Read this article to learn more about setting trendlines Finance Prop Education of ourselves Michael Boutros: Introduction to Basic Trendline Analysis.

EUR / CAD daily price chart

EURCAD EUR / CAD Daily price chart

Chart prepared by James Stanley; EURCAD on Tradingview

— Written by James Stanley, Strategist for Finance

Get in touch and follow James on Twitter: @Jndkgrf

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Categorized as Forex

By Jonathan Prop

Jonathan Prop is an independent financial advisor. He has been working in finance for the last 20 years. After retiring early in his 40s, Jonathan decided to help others get to grip with financial markets, particularly his area of expertise - forex!

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