We have seen some recovery from EUR/CAD over the past few days, with the pair pushing higher from last week’s lows of around 1.4915. EUR/CAD continues to trade between the bounds of a downwards moving channel, taken from the 20th of March. The pair is currently knocking on the upper bound of that channel, but until it is broken, we remain sceptical on the upside potential.
Because the trend is still negative, we will stick to the downside and treat this current move higher as a small correction. A move back down towards the 1.5080 level and eventually a break of it could pull EUR/CAD towards the recent lows of 1.5000 or even the 1.4950 area. Below that, the pair could make its way towards the 1.4815 zone or the lower bound of the aforementioned channel.
Alternatively, if we start seeing a test again of the upper bound of the downwards moving channel, this might interest the bulls in breaking it and driving EUR/CAD higher. More bulls could start joining in and we could see the pair moving towards the 1.5240 zone first and then possibly for a test of the 1.5315 area. If after that, the momentum still remains to the upside, then we could see EUR/CAD traveling all the way up to 1.5440, a level last seen in the beginning of May.
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