EUR/CAD surged yesterday after it found support at 1.4975, breaking above two resistance (now turned into support) barriers in a row. The pair continues to trade within the downside channel that’s been containing the price action since mid-March, and thus, we believe that the near-term path remains cautiously to the downside.
If the bears manage to take advantage of yesterday’s rally and drive the battle back below 1.5120, then we may see them aiming for the 1.5060 support. A clear dip below the latter level could pave the way towards yesterday’s low of 1.4975.
Taking a look at our short-term oscillators, we see that the RSI stands flat slightly above its 50 line, while the MACD lies above both its zero and trigger lines, pointing up. These momentum signs suggest that some more recovery maybe on the cards, perhaps for a test near the 1.5205 resistance, or slightly higher, near the upper bound of the downside channel.
However, even if we see further recovery towards the channel’s upper bound, we would still consider the near-term outlook to be cautiously negative. We prefer to wait for a break above 1.5315 before we assume that the outlook has turned positive. Such a break could confirm the upside exit out of the channel and could initially set the stage for extensions towards the 1.5430 resistance hurdle.
The content we produce does not constitute investment advice or investment recommendation (should not be considered as such) and does not in any way constitute an invitation to acquire any financial instrument or product. JFD Brokers, its affiliates, agents, directors, officers or employees are not liable for any damages that may be caused by individual comments or statements by JFD Brokers analysts and assumes no liability with respect to the completeness and correctness of the content presented. The investor is solely responsible for the risk of his investment decisions. Accordingly, you should seek, if you consider appropriate, relevant independent professional advice on the investment considered. The analyzes and comments presented do not include any consideration of your personal investment objectives, financial circumstances or needs. The content has not been prepared in accordance with the legal requirements for financial analyzes and must therefore be viewed by the reader as marketing information. JFD Brokers prohibits the duplication or publication without explicit approval.
FX and CFDs are leveraged products. They are not suitable for every investor, as they carry high risk of losing your capital. You should be aware of all the risks associated with trading on margin. Please read the full Risk Disclosure.