This is an upgrade to an article printed on February 1, considering CAD possible from the US Dollar (USD/CAD), the Euro (EUR/CAD) and the Japanese Rolex (JPY).
USD/CAD has pushed to fresh two-year-lows.
The study contained in article relies on price action and graph formations. To find out more about cost action or graph patterns, take a look at our DailyFX Education section.
Commodity currencies continue to rally and in USD/CAD, this motif has already made a mark as USD/CAD has pushed to new two-year-lows, even as the US Dollar holds support round the 90-handle.
This can make for a particularly exciting backdrop in commodity money pairs ought to the head and shoulders pattern currently showing in the USD give way; that opens the door for a potent blend of continuing strength in commodity currencies to go together with bearish breakout potential in the US Dollar.
In USD/CAD, bears didn’t want to wait for the USD to take-out its own support. Sellers are currently driving the pair to new two-year-lows, getting very near the 1.2500 psychological degree on the graph.
As looked at earlier this month, CAD/JPY carried breakout potential as prices had assembled to an ascending triangle pattern around a big degree of immunity, only inside of their 82.00 handle. Ascending triangles can lead into bullish migraines, driven by the assumption that the same bullish behavior that is brought bulls in at higher-lows will, finally, allow for a break through horizontal resistance.
The set has broken out in a huge way and costs are fast coming to the two-year-high, directly around 84.75. This, combined with the 85 psychological level, makes for an imposing field of resistance this breakout seems to be extending towards. This can make continuation prospects somewhat more daunting at current — but it will open the door for pullback potential to a prior area of immunity, around the 83.50 level on the graph.
EUR/CAD was another set looked at before this month as an alternative area to search for CAD-strength. At the time, EUR/CAD had discovered resistance on the underside of a previously bullish trendline. Such trendline inflections can often indicate a change of trend, and that’s continued to show over the past few weeks.
The set has broken down to new seven-month-lows, and also given the fresh breakout from the Canadian Dollar, this might be a difficult subject to chase. However — a current area of previous support, across the 1.5269 area on the chart, could be re-purposed for immunity.
