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Canadian dollar technical forecasts: USD / CAD, CAD / JPY


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Canadian dollar, CAD, USD / CAD, CAD / JPY Technical forecast: mixed (see below)

  • USD / CAD price action retreated to a significant area of ​​1.2622-1.2672 support.
  • CAD / JPY has extended its bullish trend and has so far spent the entire week above the psychological level of 90.00. The pair may continue to be a more attractive location for long CAD scenarios given the intense focus on the USD currently, as well as the US inflation data set to be released next week.
  • The analysis contained in the article is based on Price action and graphic training. To learn more about price action or chart patterns, check out our DailyFX Education section.

It was the story of two trends for the USD / CAD this week. The week and the year started on a strong note, with the pair bouncing off a key support area that came into play last Friday. This is the same support area that held the lows earlier in December, and this area shows between two longer-term Fibonacci levels that demarcates this key point on the chart between 1.2622 and 1.2672. . Within this area is another Fibonacci level, the 23.6% retracement of the 2020-2021 sell-off.

And there’s a relevant story here as well, as this area was helping establish support earlier last year until sellers were finally able to break through, after which it turned into resistance in March and April.

USD / CAD Daily Price Table

Graphic prepared by James stanley; USDCAD on Tradingview

USD / CAD vulnerable to USD themes

The flow of the USD helped push the pair through this week’s price action. The US currency remains in what is emerging as a longer-term range, but after a bullish push early in the week, prices started to recover following Friday’s NFP report. This is what helped USD / CAD retreat to this very key support area.

At this point, that support remains in play and while it may give way to breakdowns if the strength of the CAD continues to show, the question remains whether the USD / CAD would be the most attractive location for a such scenario. Or, perhaps, traders could focus this expectation on the strength of the CAD against another currency, such as the Japanese Yen which we’ll look at a bit further down in this article.

In USD / CAD, this key support area is short term support until it is broken, which can keep the door open for bullish USD and / or bearish CAD scenarios. Above the current price action, the psychological level of 1.2750 is looming as this is the spot that has helped maintain resistance throughout this week. Beyond that, a point around 1.2850 remains critical as it was an earlier point of resistance that the bulls were not able to maintain above for very long. And beyond that, the same 1.2950 that peaked in 2021 works as an “r3”.

Under the current price action – if this key support area gives way, the next big point on the chart would be around 1.2500 psychological level. Below, 1.2390, then 1.2255 work as levels s2 and s3.

USD / CAD technical forecast: neutral

USD / CAD Daily Price Chart (Applied Levels)

Canadian dollar technical forecasts: USD / CAD, CAD / JPY

Graphic prepared by James stanley; USDCAD on Tradingview

CAD / JPY

Over the past several months, as the USD / CAD has shown some element of mid-reversion on longer-term charts, I focused the bullish CAD scenarios on the CAD / JPY. The technical juxtaposition of the pair is one of the main reasons and from the monthly chart below we can see a breakout to the upside of a trend line which took place during the second half of last year, coupled with a support inflection around the previous resistance in December.

CAD / JPY Monthly Price Table

Canadian dollar technical forecasts: USD / CAD, CAD / JPY

Graphic prepared by James stanley; CADJPY on Tradingview

CAD / JPY short term

After a nasty two-month spill that saw over 500 pips erased from the pair’s spot price, support appeared around this trendline projection, after which the bulls made a sharp comeback in the equation. .

Along the way, buyers have pushed prices back above the psychological grip of 90.00 before year-end, and so far this week, prices have remained above that key spot in the market. graph without even testing the large figure. I highlighted a test of support here on Monday that has since seen the bulls retract the offer.

Short-term price action remains in a tight spot for the bulls, sitting near highs and far enough away from nearby support. But, this leaves the door open for bullish scenarios that can come back into play with either a pullback to support ranging from 90.00 to 90.25 or, alternatively, a breakout higher above the high of 91.66. .

CAD / JPY technical forecast: bullish

Four-hour CAD / JPY price chart

Canadian dollar technical forecasts: USD / CAD, CAD / JPY

Graphic prepared by James stanley; CADJPY on Tradingview

— Written by James stanley, Senior strategist for DailyFX.com

Contact and follow James on Twitter: @JStanleyFX

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