Technical Update: Important CAD Pairs

January 20, 2016 11:40

USDCAD

Even as the short-term ascending trend-channel favors USDCAD up-move, failure to surpass the 1.4700 mark indicates pair's pullback to 1.4590-85 immediate support, clearing which the channel support, around 1.4500 mark, becomes crucial for the pair traders to watch. If the Bank of Canada (BoC) surprises the markets by no rate cut, the pair can dip below 1.4500 which opens the door for its short-term correction to 1.4400 and the 1.4180-70 support-zone. Meanwhile, a rate-cut and a dovish speech by the Canadian central bank's Governor can fuel the pair to channel resistance, near 1.4780-85, before targeting the 1.4900 and the 1.5000 psychological magnet while continued aggression by the pair beyond 1.5000 may find it difficult to break 1.5085 – 1.5100, surpassing which it can quickly rise to 1.5335-50 area.

EURCAD

Unlike USDCAD, the EURCAD is currently trading near an important resistance region of 1.6100 – 1.6110, comprising more than a year old ascending trend-line resistance and the upper-line of northward slanting trend-channel stretched from November 2015, which might restrict the pair's further up-move and can give rise to a pullback towards its 1.5850 nearby support. Given the pair's extended drop below 1.5850, the 1.5740-35 might act as an intermediate downside rest before it could plunge to 1.5550 and the channel support of 1.5330-20. Should the pair continue closing lower below 1.5320, it becomes vulnerable enough to test the 1.4920 – 1.4890 broad support-zone, including 50-day SMA with 1.5100 being a buffer level. On the upside, a clear break above 1.6110 can fuel the pair towards 1.6330-40 area prior to targeting the 1.6500 round figure mark.

GBPCAD

Having bounced from the immediate ascending trend-channel support, presently near 2.0500 mark, the GBPCAD maintained its up-move intact and is currently trading near 2.0730 level with 2.0770 and the channel resistance of 2.0820 acting as nearby resistances prior to its run-up to 2.0870 and the December 2015 highs of 2.0950. If the bulls accelerate the pair's up-move beyond 2.0950, also clear the 2.1000 mark, 61.8% FE of its December rally, near 2.1050, becomes next important resistance for the pair traders to watch. Alternatively, 23.6% Fibonacci Retracement of the said move, near 2.0680, and the 2.0640, are likely downside levels that the pair might test during its pullback while sustained downside below 2.0640 can fetch the pair to 2.0500 channel support, breaking which chances of its drop to 2.0300 and the 2.0230 consecutive supports can't be denied.

AUDCAD

While nearby upward slanting trend-channel defines the AUDCAD rise, the pair recently turned down from 1.0080 immediate resistance and is indicating further decline to 23.6% Fibonacci Retracement of its November – December 2015 up-move, near 1.000 psychological magnet. If the accelerated downside pressure pulls the pair to below 1.0000 levels, the mentioned channel's support, near 0.9960, may limit its further decline, which if broken can magnify the pair's southward trajectory towards 0.9830-40 support-zone, 61.8% Fibo, near 0.9700 and the 0.9660 are likely important levels for the pair trader to watch. However, the pair's continued up-move beyond 1.0080 can propel it to the channel resistance of 1.0130 prior to its rally towards December highs of 1.0170 while further advances beyond 1.0170 might well witness the 61.8% FE of the mentioned move near 1.0270.

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