Important CAD Pairs’ Technical Outlook: 14.12.2017

USD/CAD

Considering USDCAD’s latest bounce from 1.2800–1.2790 support-zone, the pair seems again heading to confront the seven-week old descending TL resistance, at 1.2890; however, 1.2870 might offer an intermediate halt during its recovery. In case if the quote manages to conquer the 1.2890 mark, it can quickly rise to 1.2920 before targeting the 61.8% FE level of 1.2940. Should the pair fails to sustain latest pullback, the 1.2790 regains its importance, breaking which 1.2770 & 1.2745 could entertain short-term sellers. Moreover, pair’s extended declines below 1.2745 could push traders to closely observe the 1.2700 round-figure and the 1.2655 ascending trend-line support.

EUR/CAD

Unlike USDCAD, which is a bit far from important resistance, the EURCAD is about to surpass one such critical barrier, namely the 1.5170-80 region, in order to stretch it up-move towards 1.5230 and then to the 1.5270 resistances. Given the pair’s ability to surpass 1.5270, it becomes capable enough to challenge the 1.5330 and target November high near 1.5370. If at all the ECB disappoints global traders and the pair takes a U-turn, the 1.5130 and the 1.5080-75 may reappear on the chart while the 1.5030 and the 1.4975 TL support may limit the price downturn then after. Assuming a larger drawdown beneath 1.4975, the 1.4920 and the 1.4860 could please the Bears.

GBP/CAD

Having bounced from the 1.7110-15 support-area, the GBPCAD is gradually rising in direction to immediate TL resistance figure of 1.7310. Should the pair clears that hurdle, the 1.7370 and the 1.7400 might come alive as quotes, breaking which 1.7465 and the 61.8% FE level of 1.7580 could get Buyers’ attention. Meanwhile, 1.7200 and the 1.7155 are likely adjacent supports to observe during the pair’s reversal, which if broken could reignite the importance of 1.7110-15 zone. If the pair declines below the 1.7110, the 1.7015 trend-line number and the 1.6940 may confine its additional south-run.

CAD/JPY

Even if CADJPY has been quite off-late, the pair’s reversal from 100-day SMA indicates likelihood of its another dip to 86.95 trend-line support, with 87.30 acting as a buffer. In case if the pair closes below 86.95, the 200-day SMA level of 86.30 and the 86.00 are expected rests that it could avail ahead of testing the 85.45-30 support-zone. Alternatively, a D1 close beyond 88.00 can again propel the quote to confront the 100-day SMA level of 88.70 and then to challenge the 89.10 trend-line resistance. If prices rally above 89.10, the 89.60 and the 90.00 may become Bulls’ favorite.

Cheers and Safe Trading,
Anil Panchal

Euro Whipsaws Following Breakdown of German Coalition

New elections have so far been ruled out in Germany following the collapse of coalition talks on Sunday, which for one thing has dashed hopes for pending fiscal stimulus. The breakdown of the negotiation was a surprise, especially as it was caused by the FDP party walking away, which is Merkel’s preferred coalition partner. Immigration policy was sticking point, with fundamental differences emerging with the Green party. A key ally of Merkel, Jens Spahn, who is a members of Merkel’s CDU party, said that “there is no grounds for panic” while suggesting that some SPD members, which is the current partner of the CDU, are open to linking back up with the CDU to form a new coalition, even though the party had ruled out a repeat alliance.

The euro whipsawed first moving lower on the heels of the news that talks to form a coalition government in Germany had collapsed. The currency pair snapped back subsequently and is back to hovering near the 50-day moving average. European equities are mostly higher on the session, while Asian shares were mixed with the Nikkei underperforming closing down 0.6%.

German PPI Contracted in October from September

German PPI producer price inflation fell back to 2.7% year over year in October, from 3.1% year over year in the previous month. Pretty much as expected and with the deceleration to a large extent due to lower energy prices, which rose 2.8% year over year in October, after jumping 4.9% year over year in September. Heating oil price increases moderated and dropped back to 5.7% year over year, after spiking to a whopping 18.9% year over year in the previous month. Food price inflation also decelerated, but remains at relatively high levels. While the headline rate came down, the numbers also confirm that underlying inflation pressures are slowly picking up, with energy and food prices not the only contributors to a headline rate that is clearly above the ECB’s 2% mark. Indeed, PPI excluding energy accelerated to 2.7% year over year from 2.6% year over year in the previous month.

An exodus from U.S. high yield debt this past week including mutual funds and ETFs totaled some $4.43 billion according to Bank of America, the third largest drop on record and the biggest decline since August of 2014. The tax status of junk bonds in the pending tax reform legislation remains an open question, while short-dated market yields have continued to rise to trend highs as the Fed slowly removes the punch bowl, in addition to valuation concerns. This has led to some divergence in junk bond returns in November that only recently appeared to be noticed by stock investors.

Euro Acting Like Its Halloween

The Euro continues to cause a fright for investors and maybe that is appropriate since it is Halloween tomorrow. The Euro continues to be tested near important support levels and has not produced an upward reversal in the short-term.

Euro Trading Slightly Above Important Support

The Euro continues to trade near important support against the U.S Dollar after being taken to fresh lows on Friday when the European currency hit 1.1580.

EUR/USD 1H Chart
EUR/USD 1H Chart

The Euro is near 1.1620 now and continues to display weakened behavior. This has occurred in the aftermath of a better than expected growth number via the Gross Domestic Product outcome from the States before going into the weekend.

A Lack of Speculative Buyers

While the Euro has gained early this morning its results are not enough to signal a buyers’ parade for speculators. Most investors do not believe the U.S Federal Reserve will raise interest rates this Wednesday, but there is enough ammunition surrounding the central bank to cause nervousness in forex.

EUR/USD 4H Chart
EUR/USD 4H Chart

The additional factor that a new Federal Reserve Chairman is likely to be named this week who will start the job in February of 2018, has delivered weakness for the Euro against the U.S Dollar.

A Weaker and Better Euro for the E.U?

Let’s also remember the European Central Bank may view a slightly weakened Euro as a potentially good thing for the overall European economy, because of its ability to create better export demand.

Although long-term factors would seem to point to a higher valued Euro, the near-term downside pressure on the currency cannot be discounted and traders may look for lower values in the coming days.

EUR/USD Daily Chart
EUR/USD Daily Chart

In the short term, we believe Euro may be negative. Mid-term and Long-term we are unbiased.

Yaron Mazor is a senior analyst at SuperTraderTV.

SuperTraderTV Academy is a leader in investing and stock trading education. Sign up for a class today to learn proven strategies on how to trade smarter.

Pound Struggles, NAFTA weighed on the Loonie and Catalonia Still Hanging over the Euro

  • Following a rise in UK inflation, the GBP struggled against the dollar, How would you sum up Sterling’s week and where do you see it going next?

It’s been a dire week for the Pound, with inflation’s rise to 3% doing little in terms of support with the new BoE Deputy Governor stating that he would not be voting for a rate hike next month.

Following the uptick in inflation, September wage growth figures disappointed with wage growth continuing to lag behind inflation, weighing on consumer spending.

The BoE is in a precarious position, with rising household debt and soft wage growth raising concerns over the BoE being able to lift rates next month.

The outlook for the Pound certainly doesn’t look positive, particularly following September retail sales figures on Thursday, which were a clear reflection of the issues that the BoE and the UK economy are facing at present.

We could see some support for the Pound next month, should UK Chancellor of the Exchequer Hammond surprise the markets with the November budget, particularly should there be any tax benefits and more for the youth to boost confidence and spending.

For now, however, the direction will likely be hinged on sentiment towards Brexit with the EU Brexit Summit concluding today, though as we have seen on multiple occasions, we can expect the EU to look to strong arm the British government in negotiations which will likely be a negative for the Pound.

  • CAD gained against the USD this week, following positive manufacturing data. However, with a NAFTA set-back, what do you predict will be the effect on this pair?

We’ve seen the market be particularly sensitive to noise over NAFTA, which has weighed on the Loonie, especially with the continued delays, with talks now scheduled to resume next month and are not expected to end until the 1st quarter of next year.

While the markets continue to respond negatively to progress on NAFTA, one does also need to consider that some of the negativity may be more to do with Mexico than Canada and I would expect much of the issues with NAFTA to be priced in for now.

On the positive side, macroeconomic data out of Canada has been impressive as we saw with the latest PMI numbers released this week, with today’s retail sales and inflation figures also of particular importance ahead of the BoC monetary policy decision next week.

We’ve seen oil prices on the rise, with Brent sitting at around $58 levels which is Loonie positive and a hawkish BoC will certainly continue to provide support for the Canadian Dollar over the near-term.
So we can expect the markets to continue buying in on the dips as talks on NAFTA progress, with further gains in the Loonie likely based on the macroeconomic outlook and sentiment towards monetary policy.

  • With troubles in Catalonia still hanging over the Euro, it reached a three day high yesterday, do you see this trend continuing?

There were a number of factors that have provided support for the EUR this week, including concerns over China and growth prospects which led to an easing in risk appetite. With the EUR being a funding currency bouts of risk aversion tends to lead to gains in the EUR.

That being said, market sentiment towards the issues in Spain remain mixed, particularly when considering the fact that the issues are isolated to Spain and not beyond the Spanish borders. Granted that Catalonia accounts for 20% of Spain’s GDP and with Spain being the Eurozone’s 4th largest economy, that’s a sizeable piece of the Eurozone’s economic outlook when considering that the Spanish government had revised down growth projections for next year.

A further negative for the EUR would be if the Spanish government goes ahead and invokes Article 155 this weekend, which would remove certain powers of the Catalonian government. Thereafter it will depend on whether there is unrest and whether it spreads beyond Spain’s borders.

We’ve got the ECB monetary policy decision next week and with the markets have already responded to the disappointing plans for the asset purchasing program for next year, Draghi could surprise with a bigger cut in monthly purchases.

On the flip side, progress on U.S tax reforms could return appetite for the Dollar should the U.S President finally be able to deliver on one of his campaign promises.

Technical Update For USD/CAD, EUR/CAD, AUD/CAD & CAD/CHF: 06.09.2017

USD/CAD

Ever since the USDCAD dropped below 1.2440 mark, it never went up and has been trading in the small range between the 1.2360 and the 1.2425. However, today’s monetary policy announcement by the Bank of Canada might offer noticeable moves of the pair. Considering strong Canadian fundamentals, chances of either a rate-hike or a hint for October rate-lift is highly anticipated, which in-turn could drag the pair below the 1.2360 support and make it revisit the recent low around 1.2330. In case of the quote’s sustained downturn beneath 1.2330, the 1.2300 and the 1.2250 horizontal-lines might entertain sellers ahead of pleasing them with 1.2200 support-mark. Meanwhile, disappointment from the central bank may quickly trigger the pair’s advances towards 1.2425 and the 1.2450 resistances, break of which could escalate its recovery in direction to 1.2500 and the 1.2530. During the course of trading beyond 1.2530, the 1.2600 might act as an intermediate halt prior to fueling prices to confront the 1.2625 and the 1.2670 TL resistances.

EUR/CAD

eurcad

Following its U-turn from 1.4685-80 horizontal-line, the EURCAD is now aiming to challenge the 1.4800 – 1.4805 resistance-area, which if cleared could further propel the pair to 1.4850 and the 1.4875 numbers to north. Should buyers refrain to respect the 1.4875 cap, the 1.4940 and the 1.5000 are likely land-marks that they can target. Alternatively, 1.4750 and the 1.4700 could become nearby supports that the pair might avail before meeting the 1.4685-80 line. However, break of 1.4680 may activate the pair’s southward trajectory with the 1.4660, the 1.4615 and the 1.4585 being expected consecutive supports.

AUD/CAD

audcad

With the AUDCAD’s sincere observance to four-month old descending trend-line, the pair seems sellers’ favorite with 0.9850 be adjacent rest ahead of looking at an upward slanting TL support of 0.9825. If the pair closes below 0.9825, the 0.9770-65 horizontal-region could become its next destination, which if broke might further fetch the quote to 0.9720 and the 0.9655 supports. On the upside, the 0.9930 and the 0.9960 are likely immediate resistances that the pair may aim before confronting with the 0.9990 resistance-line that is close to 100-day SMA level of 1.0020. Moreover, Bulls’ quest beyond 1.0020 on a day’s close can make them see the 1.0050, the 1.0070 and the 1.0110 as upcoming figures.

CAD/CHF

cadchf

While 0.7790–0.7800 confined the CADCHF’s upside during last-week, the pair recently broke an immediate ascending trend-line and is indicating 0.7645 test. Should the BoC’s disappointment and/or safe-haven demands for CHF fetch prices below 0.7645, the 0.7600 and another TL support of 0.7580 gain importance, break of which could strengthen Bears to demand 0.7525 and the 0.7500 as levels. If at all BoC’s hawkish message defies CHF’s strength, the pair can easily reclaim the 0.7750 and the 0.7770 resistances prior to targeting 0.7790 – 0.7800 break. Given the buyers’ capacity to surpass 0.7800, chances of witnessing the pair’s rally towards 61.8% FE level of 0.7860 and then to the 0.7900 can’t be denied.

Cheers and Safe Trading,
Anil Panchal

Euro Roller Coaster Ride Scaring Traders

The Euro has remained under pressure the past two day. After attaining new highs, the Euro has lost value against the U.S Dollar rapidly and may continue to face headwinds the next two days as technical traders take advantage of its short-term range.

Range Proving Rough for Euro Traders

The Euro has taken traders on an amusement park like the ride this week and has traded in a broad range.

After plowing to new highs on Tuesday, the Euro promptly began to lose value against the U.S Dollar and its sudden weakness has been sustained.

EUR/USD 1H Chart
EUR/USD 1H Chart

The Euro is now trading below the 1.19 level and short-term support looks to be around 1.1820.

Nervous Euro Traders Emerging

A mid-term look at the Euro against the U.S Dollar shows its strong trend remains intact

EUR/USD 4H Chart
EUR/USD 4H Chart

However, the last two days of trading have likely caused Euro buyers to reconsider their convictions and made them nervous. Yesterday’s strong economic data from the U.S likely added additional concerns to Euro bulls who may be worried about a more hawkish U.S Federal Reserve.

Important U.S. Data Tomorrow Will Affect Euro

Important economic data will come from the U.S tomorrow via jobs numbers and inflation reports.

The Euro is likely to trade in a technical manner leading up to the U.S data tomorrow. And technical traders may take advantage of the Euro against U.S Dollar and position themselves depending on instinct. The Euro may continue to fight headwinds the next twenty-four hours as traders take advantage of its range.

EUR/USD Weekly Chart
EUR/USD Weekly Chart

In the short term, we believe the Euro may be negative. Mid-term and Long-term we are unbiased.

Yaron Mazor is a senior analyst at SuperTraderTV.

SuperTraderTV Academy is a leader in investing and stock trading education. Sign up for a class today to learn proven strategies on how to trade smarter.

Is the Euro’s 2017 Rally sustainable?

The Euro has been one of the star performers of 2017. We will now try to determine its main drivers of strength, as well as its potential outlook going forward.

Drivers of Strength

  1. Euro sentiment had been on the bearish side for a prolonged period of time. This was due to a combination of factors such as weak economic data, the Greek crisis and the rise of far-right political parties. This bearish sentiment has now shifted towards the bullish end of the spectrum, resulting in Euro strength.
  2. Eurozone economic data are improving. Germany is no longer the main force behind EZ strength; in fact, while Germany seems to be reaching a plateau, other EZ countries are emerging and picking up the baton.
  3. ECB governor Mario Draghi has recently been less dovish than usual. During the 2017 Jackson Hole Symposium he shared an optimistic outlook and didn’t talk down the Euro’s recent appreciation. This was a departure from his usual stance, which was seen by the markets as being hawkish.
  4. ECB members are already discussing the possibility of tightening monetary conditions in the near future. This will probably involve gradual balance sheet reduction as well as interest rate hikes.
  5. The danger of Greece – or another country – leaving the Eurozone has diminished substantially. Just a few years ago the possibility of Grexit was looming large, along with the potential domino effect that could even lead to a Eurozone collapse in some extreme scenarios. Today, such events carry an extremely low probability and there seems to be broad stability in the EZ.
  6. When the UK voted to leave the European Union, there was uncertainty on both sides of the equation. As Brexit negotiations began, it’s become evident that the UK government is on the back foot. Risks exist on both sides but it seems that the EU is in control of the negotiations at this point.
  7. The US Dollar has been weakening markedly in 2017, for a variety of reasons. The most broadly traded & liquid FX pair is EURUSD and it has rallied around 1500 pips from the lows. This EURUSD move has a side effect of pushing other Euro crosses higher (e.g. EURGBP, EURAUD, EURNZD etc) and sending out a picture of broad Euro strength.
  8. The combination of rising global geopolitical tensions with US Dollar weakness are sending safe haven flows into the Euro, among other “safe” currencies.

Future Outlook

Following its recent strong run, where does the Euro go from here based on fundamentals? Let’s take each point in turn.

  1. As the Euro rallied in 2017, sentiment has become more and more bullish. In fact, the DSI index has now flipped to the other extreme, registering a 93 reading on the 28th
  2. The Eurozone’s recovery is still relatively fragile overall, just like other major economies around the world. Inflation is still stubbornly below the ECB’s target and it’s hard to see the ECB tightening substantially while inflation remains subdued.
  3. Mario Draghi’s tone may have recently turned more hawkish than usual, but central bankers are renowned for being unreliable in such ways. Draghi is well aware that the Eurozone’s exports suffer as the Euro strengthens, so it’s just as probable that he will be dovish again soon.
  4. The ECB members’ hawkish speak has created expectations which must now be met.
  5. Greece is not a country that’s been “fixed”. Serious structural, fiscal and political problems remain and they will inevitably resurface in due course. Unless the country’s problems are comprehensively addressed, the exit scenario may resurface to haunt the Euro.
  6. Brexit negotiations may seem to have the EU in control, but it’s still very early days. EU officials need to make an example of the UK, in order to deter other countries from leaving. On the other hand, the UK is in the top 3 European countries by GDP and an important trading partner to EU countries. Ultimately there will likely be an acceptable compromise for both sides.
  7. The DXY has lost around 10% and is bouncing off big support at around 91.5. For the Dollar to lose more ground, the US economy needs to show continued weakness that will warrant ending the current hiking cycle. There is always the possibility of a sustained Dollar bounce and such a move will put pressure on the Euro.
  8. Geopolitical tensions are at elevated levels, with the North Korean situation being particularly worrying. However, it’s likely that these are simply political games that will be resolved with politics, with the ensuing risk-on market reaction reversing some of the recent Euro moves.
EUR/USD Weekly Chart
EUR/USD Weekly Chart

It’s undeniable that the Euro has had a stellar run in 2017. Looking into the fundamentals reasons behind this move, however, it’s hard to identify solid reasons why its strength should persist significantly. Having said that, the trend is intact and momentum is strong. The EURUSD, in particular, is now at a crossroad that will dictate which way the next 500 pips are going.

From a macro viewpoint, we think that it’s too late to enter long Euro positions. If strength continues further than the accumulation of short Euro positions will start making a lot of sense.

Technical Analysis Outlook

The EURUSD bottomed at the 1st day of this year (unsurprisingly since we have made plenty of mentions to the importance of seasonality) and rallied almost 17% since. During this rally, it has broken above multiple resistance levels with the most important one being the confluence of the large descending channel that held it in a range since the beginning of 2015 and the horizontal resistance at 1.1450 (look at the weekly chart). Yesterday we popped above the 127% Fib from the last move lower (May 2016 to the low) and came near to testing the ascending T/L resistance that has guided the uptrend since March 2017 before turning around and posting a key reversal candlestick. Today’s continuation is forming an evening star formation which adds credibility to the corrective scenario. The 1st support area is at 1.1730 which is the confluence of the broken bull flag resistance (expected to

Yesterday we popped above the 127% Fib from the last move lower (May 2016 to the low) and came near to testing the ascending T/L resistance that has guided the uptrend since March 2017 before turning around and posting a key reversal candlestick. Today’s continuation is forming an evening star formation which adds credibility to the corrective scenario. The 1st support area is at 1.1730 which is the confluence of the broken bull flag resistance (expected to be supported) and the ascending T/L support. As long as we trade above 1.1450 we expect the move lower to prove corrective.

EUR/USD Daily Chart
EUR/USD Daily Chart

This article was written by one or more of the following contributors: Blake Morrow, Nicola Duke, Grega Horvat, Steve Voulgaridis and Stelios Kontogoulas. They are all analysts at ForexAnalytix which provides macro & technical analysis for various financial instruments. Forex Analytix primary goal is to educate traders of all experience levels and to provide a wide range of tools which can help with their trading decisions.

Technical Overview For USDCAD, EURCAD, GBPCAD & CADJPY: 20.07.2017

USD/CAD

Irrespective of the USDCAD’s latest bounce from 1.2575, a week-long descending trend-line presently confines the pair’s recovery around 1.2635. Considering the USD weakness, chances of the 1.2600 and the 1.2575 come-back are high, breaking which 61.8% FE level of 1.2555 and the 1.2500 mark might give rise to expectations of a short-covering. Should Bears refrain to respect 1.2500, the 1.2485 and the 1.2460, which signifies 2016 low, could gain attention. On the contrary, break of 1.2635 TL can extend recent pullback moves to the 1.2680, the 1.2700 and then to the 1.2725 consecutive resistances. In case of the pair’s sustained trading above 1.2725, it becomes capable enough to challenge the 1.2770 resistance-mark, which if broken can help buyers to target 1.2800 round-figure.

EUR/CAD

eurcad

Unlike USDCAD, the EURCAD has been struggling with a five-month old ascending trend-line support of 1.4500, breaking which 200-day SMA level of 1.4430 might try to limit the quote’s additional downturn. Given the sellers’ dominance drag prices below 1.4430 on a daily closing basis, the 1.4350 and the 1.4230 supports should be wise to expect while being short. In case if the upward slanting TL triggers the pair’s U-turn, the 1.4600 and the 100-day SMA level of 1.4680, adjacent to descending trend-line figure of 1.4720, seem important resistances to watch. If at all the pair’s recovery stretches beyond 1.4720, the 1.4830 and the 1.4900 are likely following north-side numbers to appear on the chart.

GBP/CAD

gbpcad

With the six-week old descending trend-line successfully restricting the GBPCAD’s up-moves, the pair is currently re-testing the 1.6350 lows before looking at the 1.6300 support. However, the 1.6230 support-confluence, comprising downward slanting TL and 61.8% FE, may confine the pair’s further downside, failing to which can drag it to 1.6200 and then to 1.6115-20 support-zone. Meanwhile, 1.6450 can offer immediate resistance to the pair, breaking which aforementioned TL, at 1.6550, could play its role. Should buyers propel prices beyond 1.6550, the 1.6690 and the 1.6720 seem important levels to observe.

CAD/JPY

cadjpy

While an immediate ascending trend-line favors the CADJPY’s up-moves, the week-long descending TL, at 89.15, becomes crucial for buyers to wait for before expecting the 89.30 reprint. Should the pair manage to please Bulls with 89.30 clearance, it can rise to 61.8% FE level of 89.80 and then to the 90.00 round-figure. Alternatively, the 88.75 TL support and 88.45 are expected nearby rests for the pair, breaking which 88.25-20 horizontal-region seem crucial support. Given the pair’s break of 88.20, it can gradually come down to 88.00, 87.75 and the 87.40 consecutive supports.

Cheers and Safe Trading,
Anil Panchal

 

Canadian Dollar Ends Week Strongest amid BoC Hike Speculations

The Canadian dollar ended the week as the strongest major currency because the events during the week’s trading fueled speculations that the Bank of Canada will hike interest rates as soon as the next week.

Markets considered the comments of BoC Governor Stephen Poloz as a sign that the central bank is ready to raise interest rates. Solid employment data supported the case for monetary tightening. All those factors reinforced the view that the BoC will hike rates on July 12. As a result, the Canadian dollar was able to ignore the slump of crude oil, rallying during the week.

The US dollar was also strong, partly due to solid employment growth. Meanwhile, the Australian dollar was the among the weakest currencies as the Reserve Bank of Australia failed to join other central banks in switching its stance to more hawkish one. The weakest one, though, was the Japanese yen, driven down by emergency bond buying by the Bank of Japan.

USD/CAD slid from 1.2967 to 1.2875 — the lowest weekly close since August. EUR/CAD declined from 1.4804 to 1.4673. CAD/JPY soared 2.3% from 86.39 to 88.42.

This post was originally published by EarnForex

Technical Checks For USD/CAD, EUR/CAD, NZD/CAD & CAD/CHF: 29.06.2017

USD/CAD

Having cleared a year-long upward slanting trend-line, the USDCAD is now struggling with 1.3000 – 1.2995 horizontal-support in order to stretch its south-run towards the 1.2960 and the 1.2900 rest-points. In case of the pair’s additional weakness below 1.2900, the 1.2830 and the 1.2760 might offer intermediate halts prior to flashing 1.2650-55 on the chart. However, oversold RSI and presence of strong support-region indicates brighter chances of the pair’s pullback to 1.3060, 1.3125 and the 1.3150 consecutive resistances. Given the quote’s extended recovery beyond 1.3150, the 1.3200, the 1.3280 and the 200-day SMA level of 1.3340 can entertain follow-on Buyers ahead of pushing them to conquer with 1.3385 resistance-line.

EUR/CAD

eurcad

EURCAD’s failure to extend its recovery beyond 1.4980 signals it’s another drop in direction to 1.4730-25 horizontal-line with 1.4800 and the 1.4755 being nearby supports to avail. Should the pair refrains from respecting the 1.4730-25 region, it can quickly plunge to 1.4660 and the 1.4600 round-figure ahead of meeting 1.4530 and the 1.4490 supports. Alternatively, 1.4900 and the 1.4980 are expected immediate resistances that the pair needs to surpass before aiming the 1.5000 – 1.5010 horizontal-resistance, which if broken could help stretch the advances towards 1.5125 and the 1.5210. If at all Bulls dominate prices after 1.5210 break, the 1.5260 is likely a buffer that can be availed during their rally to 61.8% FE level of 1.5480.

NZD/CAD

nzdcad

NZDCAD recently broke 0.9510-15 support-confluence, comprising 50-day SMA & celeven-week old ascending trend-line, which in-turn favors the pair’s decline to 0.9470 and then to the 100-day SMA level of 0.9445. If Bears aren’t satisfied with 0.9445 break, they can further fetch the quote to 0.9400, 0.9380 and then the 0.9350 support-levels. Meanwhile, a daily closing 0.9515 could negate the latest breakdown and might rejuvenate the pair’s pullback to 0.9550, 0.9590 and the 0.9620 resistances. Moreover, pair’s successful trading above 0.9620, raises hopes to witness 0.9660, 0.9690 and the 0.9710 numbers on the chart.

CAD/CHF

cadchf

Following its successful bounce from 50-day SMA, the CADCHF now confronts more than four-month old descending trend-line, at 0.7360, which if broken on a daily closing basis, can help buyers target 100-day SMA level of 0.7400. During the pair’s further advances beyond 0.7400, the 0.7430 and the 0.7465 can mark their presence while 0.7500 & 0.7530 become eagerly awaited. On the downside, 0.7360 and the 0.7345 can offer adjacent supports to the pair, breaking which 0.7300 and the 50-day SMA level of 0.7265 comes into play. Given the Bears dominance after 0.7265, the 0.7190 and the 0.7120 can be alive in their radar.

Cheers and Safe Trading,
Anil Panchal

Important CAD Pairs’ Technical Overview: 31.05.2017

USD/CAD

With the three-week old descending trend-line, coupled with 50-day SMA, restricting the USDCAD’s near-term advances around 1.3495 – 1.3500, the pair becomes more likely to re-test four-month long upward slanting TL, near 1.3390, if Canadian GDP matches 0.3% forecast. Given the pair drops below 1.3390 on a daily closing basis, the 1.3350 and the 1.3330 may offer intermediate halts during its plunge towards 200-day SMA level of 1.3310. On the contrary, disappointing growth-figure and weak Crude prices might propel the pair to surpass 1.3500, which in-turn could open the door for 1.3570, the 1.3600 and the 1.3640 consecutive resistances to appear on the chart. Moreover, Bulls dominance after 1.3640 can help the buyers to aim for 1.3730 and the 1.3800 round-figure.

EUR/CAD

eurcad

Even after taking a U-turn from a week-long descending trend-line resistance, the EURCAD may bounce-off from 1.5015-10 horizontal-line and can again challenge the 1.5085 TL on weaker Canadian details. Should the pair clears 1.5085 mark, it becomes capable enough to claim 1.5130 and the 1.5160 resistances while its following advances may have to conquer 1.5200 round-figure in order to meet 1.5250 & 1.5280 numbers to north. In case if the 1.5015-10 support-zone fail to play its role, the 1.4980 and the 1.4965 can entertain short-term sellers prior to pleasing them with 61.8% FE level of 1.4950. During the pair’s additional downturn below 1.4950, chances of witnessing 1.4900 and the 1.4860 can’t be denied.

CAD/JPY

cadjpy

CADJPY’s defeat from 82.60 seems presently dragging it to 82.15-20 horizontal-line, breaking which the pair can meet 82.00 and then to 81.75 support-levels. Given the sustained trading below 81.75, the 81.30 and the 81.00 are likely buffers that can further direct the moves to month-low around 80.60. Meanwhile, a clear break of 82.60 enables the pair to flash 82.85 and the 83.00 resistances, clearing which 83.50 seems crucial to observe, which if broken could escalate the north-run towards 61.8% FE level near to 84.00.

AUD/CAD

audcad

While a fortnight old descending trend-line seems aptly restricting AUDCAD’s up-moves, the pair is expected to meet a bit longer downward slanting TL, around 0.9995. If the pair refrains from respecting 0.9995, the 0.9950, the 61.8% FE level of 0.9970 and the April low around 0.9920 could be availed as rest-points. Alternatively, break of the 1.0050 TL confirms short-term bullish formation and can propel the quote to 1.0080 and then to 1.0120. In the course of pair’s northwards trajectory beyond 1.0120, the 1.0160 and the 1.0200 are the resistances that could gain attention.

Cheers and Safe Trading,
Anil Panchal

Important CAD Pairs’ Technical Outlook: 16.03.2017

USD/CAD

Although FOMC’s disappointment and negative US crude inventory figure dragged USDCAD towards testing a fortnight low, the pair failed to offer a daily closing below 100-day SMA level and is presently witnessing bounce from the same 1.3295 support. The 1.3350 might become immediate resistance for pair traders to watch at the moment, breaking which 1.3380 and 1.3430 should be given consideration before looking at 1.3500 and 1.3540 north-side numbers. However, 1.3585 – 1.3600 horizontal-region can become difficult for the quote to surpass during its up-move beyond 1.3540, which if broken enables it to aim for 61.8% FE level of 1.3670. Alternatively, pair’s daily closing below 1.3295 SMA mark could further extend its latest drop towards 1.3210 and then to 1.3170-65 support-confluence, comprising 200-day SMA & 38.2% Fibonacci Retracement of its May – December advances. Given the pair continue declining below 1.3165, the 1.3120 and 1.3060 can act as buffers before reigniting importance of nine-month old ascending TL and 50% Fibo area of 1.3030-25.

EUR/CAD

eurcad

Following its failure to provide a daily break above 1.4375-85 horizontal-line, the EURCAD has been declining towards revisiting 100-day SMA figure of 1.4165; though, 1.4200 may offer nearby support. If the pair manages to sustain its south-run below 1.4165, the 1.4100 and 1.4030 are likely following rests to grab bears attention before targeting sub-1.4000 area. On the upside, 1.4330 and the 200-day SMA figure of 1.4355 can keep restricting the pair’s near-term advances, breaking which 1.4375-85 again comes into play. Should prices close beyond 1.4385 on daily chart, more than a year-long descending trend-line, at 1.4440, becomes crucial, surpassing which could wake the pair Bulls looking for 1.4600 round figure.

AUD/CAD

audcad

Even if the AUDCAD couldn’t extend its up-move beyond early-month high during Wednesday, a near-term ascending trend-line continues favoring its north-run. Currently, the pair seems heading to confront 1.0250 resistance, which can open doors for its rise towards 1.0265 but another upward slanting trend-line, at 1.0320, might limit its following rally. Given the quote surpasses 1.0320, the 100% FE level of 1.0350 and the November 2016 high around 1.0400 should be watched carefully. Meanwhile, 1.0200 and the 1.0170 trend-line support gains high priority if the pair reverses from present levels. If the 1.0170 is broken 1.0120 and the 1.0100 can quickly be flashed on the chart.

CAD/JPY

cadjp

With the 84.80-75 horizontal-line repeatedly restricting the CADJPY’s downside, chances of its up-move towards challenging immediate descending TL resistance of 85.50 are higher. If the pair manages to clear 85.50, the 85.80 & 86.20 can become buyers’ favorite. Moreover, successful break of 86.20 may help Bulls to inflate the prices towards 86.60, 86.75 and the 87.00 consecutive resistances. Given the quote’s U-turn and a break below 84.75, it can quickly drop to 84.60, 84.15 and then to the 84.00 round figure. Should the pair keep trading southwards after breaking 84.00, 61.8% FE level of 83.55 and the 83.15 are likely rests that it could avail.

Cheers and Safe Trading,
Anil Panchal

Important CAD Pair’s Technical Overview: 01.02.2017

USD/CAD

Following its another reversal from 1.3570 – 1.3600 horizontal-region, comprising 50% Fibonacci Retracement of January – May 2016 downside, the USDCAD maintained its downturn and is presently around 1.3010 – 1.3000 support-zone. Considering oversold RSI and pair’s repeated failures to dip below 1.3000, chances of it’s bounce to 1.3150, 1.3190 and then to 1.3260 become brighter. However, 1.3290 resistance-confluence, including 100-day SMA & month-old descending trend-line, might restrict the pair’s further advances, which if broken enables the quote to aim for 1.3400 and 1.3470 before confronting with 1.3570 – 1.3600 again. If at all the pair stretch its present downside below 1.3000 on a daily closing basis, it becomes vulnerable to meet 1.2910 & the 1.2830 support-levels. Should Bears refrain to stop governing prices below 1.2830, it becomes wise to expect 1.2760 & 1.2650 downside figures on the chart.

EUR/CAD

eurcad

Given the EURCAD’s latest U-turn from 1.4125-30 horizontal-line, the pair becomes liable to revisit 1.4060 ascending trend-line support, breaking which 1.4035 and the 1.4000 psychological magnet might halt its further downside. In case of the pair’s sustained weakness below 1.4000, the 1.3960-55 horizontal-line becomes crucial to watch for traders, which if broken can open the door for its extended south-run to 1.3900 mark. On the upside, pair’s break of 1.4130 can quickly trigger its gradual advances towards 1.4170, 1.4190 and then to 1.4215 resistances. Should the pair manage to break 1.4215, the 1.4250 & 1.4280 might offer intermediate halts prior to fueling the quote beyond 1.4300.

CAD/JPY

cadjpy

As 86.35-30 horizontal-line provided much needed trigger to the CADJPY, the pair seems heading towards 87.00 and then to 87.55; however, a month-old descending trend-channel resistance, at 87.70, becomes an important hurdle for the quote to surpass in order to aim for 88.00, 88.60 & 89.00 resistance-levels. Meanwhile, 86.30 can continue acting as short-term strong support, breaking which prices can quickly dip to 50% Fibonacci retracement level of 85.80 before meeting 85.50. During the pair’s sustained drops below 85.50, the 85.00 and channel-support-line of 84.70 should be watched closely, which if broken may give rise to its fresh downturn towards 84.00 & 83.30.

AUD/CAD

audcad

Even after bouncing from 0.9850, the AUDCAD might find it difficult to surpass 0.9930 horizontal-line, which in-turn signal brighter chances of a pullback towards 0.9880 & 0.9850. If the pair stretches the pullback below 0.9850, the 0.9815 & 0.9780 are likely stops that it could avail before confronting 0.9760-55 multiple support-zone. Alternatively, the pair’s break of 0.9930 enables it to meet 0.9980 and the 1.0000 psychological magnet. Moreover, a sustained up-move beyond 1.0000 might please buyers with 1.0025 & 1.0050 before 1.0090-95 horizontal-line could question Bulls’ strength.

Cheers and Safe Trading,
Anil Panchal

Decent Long-Term Sell Signal on an Exotic Forex Instrument

That instrument that we are talking about is EURCAD and we can spot here a beautiful trend reversal pattern – head and shoulders, which is already active. As we can see, since the second half of the 2015, the price created a H&S pattern (green areas), which ended in the November with a bearish breakout. The price broke the neck line (both: black line and an orange horizontal area), which triggered the sell signal.

After the breakout, as it usually happens, the price retraced some of the downswing and tested the neckline as a current resistance. The test was positive for sellers and the price created the shooting star candlestick formation with a long head bouncing from the neck line )red rectangle). That can be considered as a strong sell signal and it was read by the traders exactly in this way. The price aimed south and attacked the lows from the whole 2016 (purple). We can see that this area is still under the heavy pressure and chances that it will be broken soon are relatively high.

EUR/CAD Chart
EUR/CAD Chart

There are a lot of factors supporting the short side of the market: trend (lower highs and lows), technical formation (H&S), candlestick pattern (shooting star) and a resistance (neck line). This significantly increases the odds for a downswing. The first target should be the bottom blue line, which is a long-term support here. To this area we do have around 300 pips, which can be a good catch for mid and long-term traders.

When entering this trade, keep in mind that on Wednesday we do have a BoC rate decision and on Thursday the same from the ECB. This complicates the situation a little bit but on the other hand, this setup is long-term, which protects us from the short-term spikes in the volatility.

This article is written by Tomasz Wisniewski, a senior analyst at Alpari Research & Analysis