Absence of strong up-moves after the USDCAD’s recent U-turn isn’t a sign of its fresh south-run as 100-day SMA and support-line of short-term descending trend-channel, at 1.2965-60, still stand tall to limit the pair’s decline. In case if the pair refrains to respect the 1.2965-60 support-confluence, more than six-month old ascending trend-line, near 1.2920, followed by the 1.2900 round-figure, could challenge the sellers. Assuming that the quote closes beneath the 1.2900 mark on a D1 basis, then it can plunge to 1.2800 and the 1.2740 support-levels. On the upside, the 1.3040, the 1.3080 and the 50-day SMA level of 1.3110 seem immediate resistances for the pair to confront during its advances. Should prices rally beyond 1.3110, the 1.3160, the 1.3220 and the channel-resistance figure of 1.3235 may gain market attention.
Ever since the EURCAD slipped below 50-day SMA, it never climbed it back on the daily closing basis, which in-turn signal brighter chances for the pair’s further downturn to 1.5000 psychological magnet. However, an upward slanting trend-line, at 1.4950, could restrict the pair’s additional drop past-1.5000, if not then the 1.4855, the 1.4800 and the 1.4730-20 horizontal-region may appear in the Bears’ radar to target. Meanwhile, the 1.5145, the 1.5200 and the 1.5255, comprising 50-day SMA & 50% Fibonacci Retracement, are likely adjacent resistances that might question the pair’s recovery. Given the pair’s ability to surpass 1.5255 barrier, the 1.5315, the 1.5370 and the 100-day SMA level of 1.5420 can entertain the buyers prior to troubling them with 1.5510 resistance-line.
Not only 200-day SMA but upper-line of “Rising-Wedge” Bearish technical pattern also confines the CADJPY’s rise around 85.85 and the 86.05 respectively. As a result, pair’s profit-booking to 85.20 and the 85.00 formation support can’t be ignored. Though, break of 85.00 could confirm the bearish pattern and might quickly drag the quote to 50-day & 100-day SMA confluence region of 84.40-35, the 83.80 and the 83.50-45 consecutive rest-points. Alternatively, pair’s successful break of 86.05 negates the downturn signaling formation and may escalate the up-moves in direction to the 86.45 and the 87.00 nearby resistances. If the pair clears the 87.00 hurdle to north, it can jump to 87.75 and the 88.15-20 levels.
This article was originally posted on FX Empire
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