The EUR/CAD pair initially fell during the course of the session on Thursday, but found enough support at the 1.4750 level to turn things back around and form a nice-looking hammer. The hammer sits just above this support level, and as a result I believe that the buyers are going to get involved every time we pull back. On top of that, the Canadian dollar is going to suffer as long as the oil markets are soft. Even though they have seen a bit of a revival recently, the truth of the matter is that the oil markets are far from showing any signs of real strength. Because of this, the Canadian dollar will be soft against less commodity driven currencies such as the Euro and of course the US dollar. With this being the case, it makes sense that this uptrend continues over the longer term in my opinion
Pullbacks
I’m looking for pullbacks in order to start buying, as the market continues to offer buying opportunities every time we fall. The 50 day exponential moving average is just below the support level at the 1.4750 level, and with that this market should continue to go higher given enough time and patience. I believe that the market should continue to go higher given enough time but I think that in the meantime we are simply trying to build up enough momentum to continue. The 1.50 level above will be the initial target in my opinion, and then eventually we will reach the highs again near the 1.55 level.
Ultimately, I feel that this market should continue to go much higher, and even above the 1.55 level. That is not until we break down below the 50 day exponential moving average that I would consider selling this pair, and of course we would have to see strength in the oil markets simultaneously in order to actually put any real money to work to the downside.
