Canadian Dollar Price Forecast: USD/CAD, CAD/JPY And EUR/CAD
A major, significant level of support came into play in USD/CAD a couple of weeks ago. I had highlighted this in an article around that inflection, as the pair had just run into the 50% marker of a very long-term major move at 1.2622.
A few days later, that support inflection had led into a morning star formation, often followed with the aim of bullish reversals, and this was combined with a falling wedge which will similarly be followed with aims of bearish reversals. Since then, buyers have been in-charge and have helped to prod the pair up to a fresh monthly high. But, there may be another item of resistance ahead, which I’ll look at in the next chart.
USD/CAD FOUR-HOUR PRICE CHART
(Click on image to enlarge)
Chart prepared by James Stanley; USDCAD on Tradingview
Taking a step back on the chart, and there’s another item of resistance that’s recently come into play, and this is highlighted with the red trendline on the below chart. This trendline originates from the March high and connects with the October and November swing-highs. The projection from that trendline came into play last Thursday and held again through Friday.
This may be highlighting another falling wedge but this one of a longer-term variety. If bulls can push through here, the next obvious spot on the chart is the same support/resistance zone around 1.2952-1.3000 that’s been in-play since around the 2020 open.
USD/CAD DAILY PRICE CHART
(Click on image to enlarge)
Chart prepared by James Stanley; USDCAD on Tradingview
POTENTIAL FOR A BREAK – LOOK TO THE US DOLLAR
The big question as to whether the above scenario results in another topside breakout will likely come from whether the US Dollar can elicit its own bullish breakout. The potential is there at this point, with a few high-impact events on the economic calendar, key of which is the Friday Non-farm Payrolls release, which drops at the same exact time as Canadian jobs numbers for the month of January are released (8:30 AM Eastern Time).
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