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Technical Overview: Important CAD Pairs


Even if the USDCAD managed to clear two-month old descending trend-channel during late last week, the pair failed to extend the breakout beyond 50-day SMA and 61.8% Fibonacci Retracement of its May 2015 – January 2016 upside and is currently witnessing a pullback towards channel resistance-turned-support re-test, at 1.2850. If the pair drops into the channel, the 1.2755-50 and the 1.2690 are likely consecutive support numbers that it could witness prior to visiting the 1.2590 and the 1.2500 levels. However, the channel-support, near 1.2370, might limit its further downside below 1.2500 round figure mark. Should the pair reverses from the present levels, the 1.2970-75 resistance confluence can continue holding its short-term upside captive, which if broken needs a closing confirmation above 1.3000 psychological magnet to propel the pair towards 1.3160 and the 1.3200 resistance levels. Moreover, pair's successful trading above 1.3200 enables it to challenge the 50% Fibo level of 1.3300 and the 1.3360 mark, comprising 200-day SMA.


Alike USDCAD, the EURCAD also seems failing to sustain its recent breakout, when it surpassed the downward slanting trend-line stretched from January, as it attempts to drop below immediate ascending triangle support of 1.4680. Given the pair's break of 1.4680, the 1.4600 becomes a quick rest-point for it to clear before testing the resistance-turned-support-line, at 1.4510 now, while a breakdown below 1.4510 negates the pair's recent surge and can drag it to 1.4420 support mark. Moreover, pair's additional downside below 1.4420, can have 1.4335 and the 1.4250 supports as intermediate levels before revisiting the April lows around 1.4180. On the upside, 1.4740 and the 1.4790 can act as nearby resistances for the pair, which are followed by the triangle resistance-line of 1.4820. If the pair surpasses 1.4820, the 1.4880 and 38.2% Fibonacci Retracement of its January – April downside, near 1.4915, are likely upside levels for the pair to go-through prior to reclaiming the 1.5000 – 1.5010 horizontal resistance-line.


Following its break of 1.8500 – 1.8510 horizontal resistance, encompassing 38.2% Fibonacci Retracement of its March – April downside, the GBPCAD rallied towards the highest levels in a month; though, it failed to clear the 61.8% Fibo and recently dipped below nearby ascending trend-line support, signaling brighter chances for 1.8500 re-test. However, short-term ascending trend-channel support of 1.8475 might restrict its further downside, failing to which can drag the prices to 23.6% Fibo level of 1.8350 and then to 1.8300 round figure mark support. If at all the pair reverses from the current levels, 1.8650 trend-line level can cap its bounce, breaking which 1.8700 and the 61.8% Fibo, at 1.8760, are likely following resistances that it could witness before challenging the channel resistance-line of 1.8800 mark. Should the pair successfully emerges out of 1.8800, the 1.8850 and the 1.8890 may hold its subsequent rise before it could claim the 1.9000 psychological magnet.


CADCHF's reversal from 0.7420 seems presently fueling the pair towards March month highs around 0.7600 mark, clearing which 0.7650 might act as a buffer resistance before it could reclaim the 0.7725-35 resistance-zone, comprising 61.8% FE of its January – March upside and multiple highs marked during November – December 2015. However, pair's further upside above 0.7735 could well be capped by four-month ascending trend-channel resistance-line, at 0.7815 now.
Alternatively, 0.7500 and the 0.7465 are expected nearby supports for the pair to witness, breaking which 23.6% Fibo and the channel support confluence around 0.7400 becomes a strong level for the pair traders to watch. Given the pair's weakness to hold 0.7400 mark, it becomes liable to visit the 100-day SMA level of 0.7315.

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Thursday, 12 May, 2016 / 3:48

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