EURCAD has been in a downtrend since falling from the June 2 high of 1.5257. There is risk to the downside since the momentum indicators are bearish. RSI is below 50 but not yet oversold, so there is a possibility of a move lower. The MACD is falling and approaching close to zero. Other bearish signals were given when prices broke below the 50-day moving average in mid-June. Meanwhile, the tenkan-sen has crossed below the kijun-sen line, giving a bearish signal, while prices have pierced the daily Ichimoku cloud.
EURCAD has been holding above the cloud until last week. The cloud top stands at 1.4794 and was acting as support until it failed and prices have dropped to threaten 1.4691, which is the 38.2 Fibonacci retracement level of the upleg from 1.3782 to 1.5257. The mid-point of this February to June uptrend is a critical support level. Falling below this level would start to change the medium-term bullish market structure.
Major resistance is expected at the 23.6% Fibonacci at 1.4907. A sustained beak above this could weaken the recent downside bias and see prices target the June high of 1.5257 for a resumption of the uptrend.
Looking at the bigger picture, EURCAD still maintains a bullish outlook as long as the market remains above the cloud. The rising 50-day moving average and its positive alignment with the 200-day moving average also supports a bullish view for the medium-term.
Forex trading and trading in other leveraged products involves a significant level of risk and is not suitable for all investors.
Recommended Content
Editors’ Picks
EUR/USD clings to gains above 1.0750 after US data
EUR/USD manages to hold in positive territory above 1.0750 despite retreating from the fresh multi-week high it set above 1.0800 earlier in the day. The US Dollar struggles to find demand following the weaker-than-expected NFP data.
GBP/USD declines below 1.2550 following NFP-inspired upsurge
GBP/USD struggles to preserve its bullish momentum and trades below 1.2550 in the American session. Earlier in the day, the disappointing April jobs report from the US triggered a USD selloff and allowed the pair to reach multi-week highs above 1.2600.
Gold struggles to hold above $2,300 despite falling US yields
Gold stays on the back foot below $2,300 in the American session on Friday. The benchmark 10-year US Treasury bond yield stays in negative territory below 4.6% after weak US data but the improving risk mood doesn't allow XAU/USD to gain traction.
Bitcoin Weekly Forecast: Should you buy BTC here? Premium
Bitcoin (BTC) price shows signs of a potential reversal but lacks confirmation, which has divided the investor community into two – those who are buying the dips and those who are expecting a further correction.
Week ahead – BoE and RBA decisions headline a calm week
Bank of England meets on Thursday, unlikely to signal rate cuts. Reserve Bank of Australia could maintain a higher-for-longer stance. Elsewhere, Bank of Japan releases summary of opinions.