While EURCAD met all parameters for a decline within the week, USDCAD still struggles to figure out what route would make a smooth ride. Let’s look at USDCAD and EURCAD technical Analysis
31 March, AtoZForex – U.S dollar vs the Canadian dollar seems to be begging for momentum to push as the two weeks old consolidation remains intact. USDCAD is seen to be retracing a portion of Wednesday’s oil-driven gains as market participants shift their focus back to the outlook for relative central bank policy. The BoC policy decision is now less than two weeks away and key policymakers have maintained a remarkably dovish tone with recent comments from both DG Schembri and Governor Poloz highlighting ongoing concern about the economy’s material excess capacity.
USDCAD and EURCAD technical Analysis
The USDCAD had an impressive run with the bears on Wednesday on the back of higher oil prices. The rise in crude was driven mainly by reports from Kuwait that OPEC is in talks to include all members in further extending OPEC cuts. The rise in oil helped to drive USDCAD lower on Wednesday ahead of today’s GDP report.
USDCAD has once again tested and bounced off its 100-day MA (1.3274), a level of crucial support in the period since mid-March. The broader technical perspective is remarkably muted with neutral momentum signals and weak trend strength indicators. The 1.33 level roughly coincides with the 76.4% retracement level. A failure to hold opens up the risk of a push back to the mid-1.32s.
EURCAD has been under considerable pressure all through the week. It was seen tumbling back below the 200 days MA (1.4357). This was as a result of its recent rejection of the ascending trend line off the Dec 2015-April 2016 lows. Momentum signals have turned bearish. For those who have been following all through the week, it has been such a smooth ride as our limit orders were filled above the 1.4509 handle. We look to further downside towards the 100-Day MA around 1.4130. While still early, we note the potential completion of a bearish outside reversal on the weekly chart. This will be significant for bears going forward. However, we shall keep you abreast of the happenings and actionable levels around this pair going forward.
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