The EUR/CAD pair fell initially during the session on Tuesday but found enough support at the 1.4750 level to turn things back around and show a significant green candle. We are currently still in the middle of consolidation, but it appears that if we can get above the 1.50 level, this market will then reach towards the 1.55 handle given enough time. I feel that short-term charts could be used to enter to the upside if we get supportive candles after pullbacks. On the other hand though, I still believe that the 1.50 level above is resistive, but it has been sliced through previously making it not as big of a deal as it normally would be.
On the chart, you can see that we have been in a nice uptrend for some time now, and the 50 day exponential moving averages plotted just below what would be the trend line. With this, the market looks like it is more than likely going to continue to see buyers as we go long.
Euro strength, oil weakness
Although the oil markets have rallied over the last couple of days, Tuesday saw a massive selloff. Quite frankly, it’s going to be much easier holding the Euro that will be to hold oil, which is essentially what the Canadian dollar is used as a proxy for by currency traders. Because of this, I think that this pair continues to grind its way back towards the 1.55 level and as a result I am bullish in general. I don’t have any interest in selling, at least not as long as we can stay above the 50 day exponential moving average which of course is used by a lot of long-term traders.
In fact, I believe that there is a significant amount of support all the way down to the 1.45 handle. That area will coincide with an uptrend line, and as a result we should find buyers every time we pullback.
