EURCAD - Bullish Trigger Confirmed
|Bearish signals were given in EURCAD in February. Firstly with a negative cross in RSI through it's moving average, with this trigger then confirmed by a corresponding 'dead' cross in the spot price.
This move resulted in a sharp decline in April that confirmed the view and yielded the year's lows. But there was a lack of follow through and the bulk of the year has been dominated by sideways trading. Selling rallies was the main background element for EURCAD but this has come to an end.
In July, RSI made a false (unconfirmed by spot) positive break and that was followed by another in August. That bullish trigger has now been confirmed by last week's reversal of initial downside. This time that bounce converted into more significant demand and EURCAD closed above the 21 week moving average for the first time since February.
The market has seen no reaction in the first 2 days of this week and so, with the weekly Keltner channel showing an increasingly positive tone, I think the trend is now Bullish.
I'm looking for the upside to focus firstly on 1.4826, May's peak, and then 1.4917, a 38% correction to this year's EURCAD decline.
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