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Canadian Greenback Technical Evaluation: USD/CAD, CAD/JPY

canadian-greenback-technical-evaluation:-usd/cad,-cad/jpy

Canadian Greenback, USD/CAD, CAD/JPY Speaking Factors:

  • USD/CAD is bouncing from a significant assist zone after going all of 2021 with no take a look at of the 1.3000 psychological degree.
  • CAD/JPY could also be extra enticing for CAD-bulls, and costs are testing a key spot of assist across the 90.00 psychological degree for that theme.
  • The evaluation contained in article depends on value motion and chart formations. To be taught extra about value motion or chart patterns, try our DailyFX Schooling part.

It’s a quick begin to the New Yr because the US Greenback has put in a topside break to begin the yr, pushing larger from longer-term vary assist. This has helped to provide a robust bullish transfer in USD/CAD, simply after a significant assist zone had come again into play.

Two weeks in the past, the pair had pushed as much as a key resistance degree of 1.2850. As I had shared on the time, this saved the door open for a transfer as much as resistance on the 1.2950 degree which, on the time, had functioned because the 2021 excessive within the pair. That degree was hit on the next Monday (Dec 20) after which costs then began to reverse.

Because of this USD/CAD went everything of 2021 with out testing the psychological 1.3000 degree. However, it additionally allowed for costs to proceed pulling again till assist may come into play at 1.2622, which is the 50% marker of the 2002-2007 main transfer, and this is identical value that had helped to set assist earlier in December, with a significant bounce creating after the Financial institution of Canada charge choice.

USD/CAD 4-Hour Value Chart

USDCAD four hour price chart

Chart ready by James Stanley; USDCAD on Tradingview

USD/CAD Breakout Potential

The 2020-2021 sell-off continues to loom giant in USD/CAD. The pair fell by greater than 2,600 pips in a year-and-a-half, till lastly constructing in assist across the 1.2000 psychological degree. The 23.6% Fibonacci retracement from that sell-off is in the identical zone of assist that’s at the moment serving to to carry the lows.

However, it’s the 1.3000 degree that is still of curiosity right here, as that value is confluent with the 38.2% retracement of that main transfer and the psychological degree of 1.3000 was a giant spot within the pair forward of the 2021 open.

This will maintain the door open for bullish eventualities in USD/CAD, in search of USD-strength to retain a desire over CAD-strength.

USD/CAD Weekly Value Chart

USDCAD weekly price chart

Chart ready by James Stanley; USDCAD on Tradingview

USD/CAD Shorter-Time period

Taking a shorter-term have a look at the matter and it could appear that the bullish theme wants a bit extra work earlier than it may be able to go.

The bounce from key assist has to this point been sturdy and that’s encouraging. However, costs at this level have merely bounced as much as resistance at prior assist, and the 1.2750 degree appears to have slowed the incline. This will set the stage for higher-low assist potential later within the week, in search of a push again in the direction of the 1.2621-1.2672 zone, with a higher-low above final week’s 1.2617 low print.

USD/CAD Two-Hour Value Chart

USDCAD two hour price chart

Chart ready by James Stanley; USDCAD on Tradingview

CAD/JPY Bullish Potential

For these in search of eventualities of CAD-strength, meshing up the Canadian foreign money with one thing just like the Japanese Yen could also be extra promising. Whereas the Fed is taking a look at larger charges in 2022, the BoJ doesn’t appear to be on the same web page and the continued damaging charge regime in Japan may assist to proceed weakening the Japanese Yen. And at this level, CAD/JPY retains some bullish curiosity given the latest higher-high and higher-low that printed within the second half of 2021 commerce.

From the month-to-month chart under, we will see a previous resistance trendline coming again in as assist to assist set the month-to-month lows for November and December. The 38.2% retracement of that transfer plots simply above the 90.00 psychological degree, which is a key zone on the chart.

CAD/JPY Month-to-month Value Chart

CADJPY monthly price chart

Chart ready by James Stanley; CADJPY on Tradingview

CAD/JPY Shorter-Time period

Taking a shorter-term have a look at the pair highlights the significance of the 90-90.24 zone for near-term bullish eventualities. The bullish run has been pretty one-sided because the low was set on December 20th, with however a pause within the transfer because the 90.00 psychological degree got here again into the image. However after buying and selling above 91.00 on New Yr’s Eve, the pair has pulled again and since discovered assist on the Fibonacci degree of 90.24, which was the prior December swing-high.

CAD/JPY 4-Hour Value Chart

CADJPY four hour price chart

Chart ready by James Stanley; CADJPY on Tradingview

— Written by James Stanley, Senior Strategist for DailyFX.com

Contact and comply with James on Twitter: @JStanleyFX

DailyFX gives foreign exchange information and technical evaluation on the traits that affect the worldwide foreign money markets.

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