EUR/CAD Technicals – Waiting for breakout of EUR/USD to extend rally

Daily Chart

Prices broke 1.32 yesterday, but some resistance could be seen in the form of Channel Top. Price could still yet move up slowly along the rising line, but any weakness in bullish momentum will send EUR/CAD potentially back below to the Channel Bottom, potentially around 1.30 round number should it happens. Reason for the EUR/CAD rise can be attributed to the rally in EUR/USD which saw prices pushing closer to 1.34, rather than an inherent weakness in CAD. Noting this relationship, the ability for Fiber to break the 1.34 resistance becomes paramount for further advancement in EUR/CAD.

Weekly Chart

Weekly chart shows prices recovering from a recent downtrend. We’re potentially trading back into the 1.29 – 1.34 range, with a break higher exposing 1.34 – 1.44 range. Bullishness can be implied from the manner which price rallied from 1.29 support/resistance, and also how prices managed to break higher from the multi-year downward sloping trendline. Stochastic offers another view though, with readings in the Overbought region. That in itself doesn’t imply a halt in price rally, bu rather warn us about future pullbacks, as readings tend to stay in the Overbought/sold region for an extended time during strong trends. A bounce from the Channel Top should coincide with bearish reading from Stochastic, which would add confidence about price heading lower back to 1.29, or straddle slowly along the multi-year trendline once more.