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Important CAD Pairs: Technical Outlook


During its upward swing from four-month old ascending trend-line support, the USDCAD managed to print a fresh high since late-July; however, 1.3245-65 horizontal resistance, comprising July highs and 200-day SMA, might restrict the pair's additional advances. Given the headline US details, scheduled for Thursday and Friday, print upbeat figures for the world's largest economy, and the Crude prices also weaken, the pair might surpass 1.3265, which opens the door for its upward trajectory towards 1.3400 area with 38.2% Fibonacci Retracement of its January – May decline, at 1.3300 being intermediate halt. Moreover, pair's successful trading above 1.3400 needs to clear 1.3475 and the 1.3500 before targeting the 50% Fibo level of 1.3570. On the contrary, 1.3150-45 can continue offering immediate support to the pair, breaking which 1.3055 and the 50-day SMA level of 1.3025, adjacent to 1.2985 level of 23.6% Fibo are likely following readings to observe. In case the pair decline below 1.2985, 1.2930 might pose as a buffer support before dragging the pair to 1.2845 TL support, which if broken can flash 1.2740 and the 1.2650 numbers.


Unlike USDCAD, the EURCAD already surpassed an important horizontal resistance-area on Tuesday and marked five-month high on Wednesday; however, overbought RSI seems presently dragging the pair from 1.4875-80 resistance towards revisiting the 200-day SMA support of 1.4775. Should the pair declines below 1.4775, the 1.4740-30 zone again comes into play, which if broken enables the bear to fetch prices to 1.4680 and the 1.4625 supports. Alternatively, pair's clear break of 1.4880 is likely triggering its rally to 1.5000 psychological magnet and the 1.5110 north-side figures. Given the pair surpasses 1.5110, chances of its additional rise to 1.5250 can't be denied.


With downbeat readings of UK Retail Sales, the GBPCAD seems less inclined to challenge 1.7540-70 region and might reverse to 1.7350 immediate support; though, short-term ascending trend-channel support, at 1.7270, followed by 23.6% Fibonacci Retracement of its May – August dip, near 1.7240, could confine the pair's additional downside. If the pair fails to respect 1.7240, it can swiftly drop to 1.7140 and the 1.7025-20 southwards figure, clearing which one can expect 1.6880 on the chart. Meanwhile, pair's ability to surpass 1.7570 on a daily closing basis enables it to test 1.7630, comprising 38.2% Fibo, before challenging the 1.7760-70 area, including 100-day SMA and the channel resistance. Should the pair rises beyond 1.7770, it becomes wise to favor the bulls towards 1.8000 psychological magnet.


Following its failure to clear the descending triangle resistance during early-month up-moves, the CADJPY now aims to test the formation support region of 76.80-70 before targeting the June lows around 76.00. Given the CAD weakness continue supporting the bears below 76.00, the pair becomes weaker enough to test 61.8% FE of its April – June plunge, near 74.60. However, pair's trading above 77.30 support, together with near oversold RSI level, indicate brighter chances of its bounce to 77.85 and the 78.50 nearby resistances ahead of testing 50-day SMA of 78.85 and the 79.30 levels. Though, pair's additional north-run beyond 79.30 again witnesses pattern resistance of 79.55 as a strong barrier towards its expected rise to 100-day SMA level of 80.70.

Cheers and Safe Trading,

Anil Panchal

Friday, 16 Sep, 2016 / 3:12

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