Canadian Dollar Price Outlook:
- USD/CAD[1] has stalled beneath Fibonacci resistance as the pair grasps for a longer-term trend
- CAD/JPY[2] forfeited much of the ground it recovered in early June and looks to hold above support
- NZD/CAD[3] looks to be on the precipice of a break out, but the direction is yet unclear
Canadian Dollar Forecast: USD/CAD, CAD/JPY & NZD/CAD Levels
The Canadian Dollar[4] has long shared a degree of positive correlation with crude oil[5], affording the currency a growth-sensitive tilt in the lens of broader macroeconomic markets. Consequently, many CAD pairs suffered in the wake of the coronavirus outbreak and different crosses have recovered to differing degrees in the months since. USD[6]/CAD was no exception as the pair rocketed higher in February and March, only to eventually bleed lower in the following months.
USD/CAD Price Chart: 4 - Hour Time Frame (March 2020 – June 2020)
With the larger downtrend still intact, recent shifts in risk appetite have seen USD/CAD hold above support near the 1.34 mark with the pair consolidating over the last few days. With equity markets falling under fire on Wednesday, it is hardly surprising the “safer” US Dollar[7] was appreciating compared to the Canadian Dollar – a theme that will likely remain for weeks to come as bouts of risk aversion reemerge.
While past price action has seen USD/CAD decline, the subsequent consolidation might allow bulls to make a more concerted effort higher, particularly if risk aversion persists in the days ahead. With that in mind, the pair may continue lower in the longer-term and any venture beneath the 1.34 mark would open the door to further losses from a technical perspective. Still, sentiment hangs in the
