Canadian Dollar Outlook: USD/CAD Rejects Support, CAD/JPY Path Higher

USDCAD: Despite petroleum prices rising to new multi-year highs, USD/CAD has continued to show little signs of breaking its latest array (1.2000-1.2150), which is likely be maintained until Friday's jobs report.

Canadian Dollar Outlook: USD/CAD Rejects Support, CAD/JPY Path Higher

Yesterday's move in oil and the first drop in the greenback saw USD/CAD evaluation its YTD non (1.2009), but business need at 1.2000 saw the set immediately reverted back into the mid-1.20s. While my view in recent weeks was to get a countertrend rally in the pair since positioning was somewhat stretched, 1.2140-45 has continued to cap rallies. With this, with oil prices now breaking out on the topside, it would seem that a 1.20 fracture is much more likely than not. Although, the prognosis will become clearer once the job report is out of the way.

The weekly chart highlights just how far the Loonie has come from the greenback. If the pair move below 1.2000 there's simply 1.1916 (May 2015 low) with little in the way of remarkable support beneath there. That said, momentum studies (RSI) continue to highlight that USD/CAD has become the most oversold since 2007.

CAD/JPY: As risk appetite stays solid and with oil prices extending greater, the course of least resistance for your cross remains higher. Dips likely to find support with short term DMAs (20D) situated at 90.29 and the cross heads towards the 2017/18 shirts at 91.63 and 91.55 respectively.

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