By: Mike Kulej
After a prolonged down move, the last couple of days brought a possibility of a trend change for the EUR-CAD. On the intermediate term chart, the most recent major price down swing took this pair from 1.4000 to 1.3200 in about two week’s time. In the current environment, this was a large move, and a correction would be reasonable here.
On the way from 1.4000, the price made additional minor highs at 1.3550 and 1.3400. In response to interest rate decision from the Bank of Canada, the EUR-CAD rallied above the high of 1.3400, satisfying the first requirement for a trend change. It reached 1.3470 and has been drifting sideways for the last two days.
The 1.3470 established a new resistance, which the price my break in order to continue higher. If this happens, the Fibonacci projection levels can be used to estimate how far this rally might progress. Projections from the 1.3294 – 1.3470 indicate 1.3570, 1.3635 and 1.3735 as possible objectives.
Technical indicators suggest that the uptrend is likely, if 1.3470 is breached. The MACD has turned positive, climbing above the zero line, while the Momentum indicator resumed the upward slope. Put together, all these elements are bullish, even if this turns out to be only a correction.
EUR-CAD is Trying to Turn Bullish
DailyForex.com