By: Mike Kulej
Recently, the EUR/CAD has become one of the least active currency pairs. A big change from the early part of 2010, when it fell from 1.6000 to 1.2450. That was followed by a rebound to 1.3700, after which the EUR/CAD started to drift sideways, within a narrow range, at least as seen on a daily chart.
In the process, this pair started to build a trading channel that by now is very well defined. This channel is drifting down, and about to meet the main up trendline, with a starting point at the 1.2450 low. It already provided a support last week, at 1.3064. Chances are it will do that again, soon. As the price is approaching the confluence of the channel, the trendline and the 100 SMA, we can expect a more decisive movement develop.
When trading channels are sloping down, as this one is, more often than not it is breached to the upside. If that happens, the EUR/CAD could become more active, resume its uptrend, likely reaching the main resistance at 1.3720, and perhaps even move higher.
Should the up trendline fail to provide more support, the channel could be valid for much longer. In this case, the Stochastic Indicator might provide good trading opportunities, as it turns at the channel boundaries rather nicely.
EUR/CAD In a Trading Channel
DailyForex.com