EUR/CAD Price Analysis: Bears picking up discounts on a fade on rallies

EUR/CAD bears seeking downside extension to daily demand area.
Discounts are being handed out to the bears as they test bullish commitments.

Ross J Burland FXStreet

Regarding the prior analysis, EUR/CAD Price Analysis: Bears seek a break of hourly support, the bears got what they wished for in a fade on rallies.

Prior analysis

EUR/CAD's upside correction has been capped by a significant Fibonacci level and the focus remains firmly on the downside.

The following is a top-down analysis that illustrates the bias.

Daily chart

The daily chart's trajectory is south which raises prospects of a short opportunity from the lower time frames.

1-hour chart

From a 1-hour perspective, the current support structure offers a faster entry point to target the downside from a restest of the support that would be expected to act as resistance.

Momentum is bearish and the price is well below the 21-SMA.

Live market, 1-hour chart

As illustrated, the price has since melted to the downside and bears indeed were able to capitalize on a restest of the prior support structure for a discount on the short side.

The price has again offered a discount from fresh lows to a 38.2% Fibonacci retracement that meets prior spike lows, a confluence that would be expected to now act as resistance.

That being said, slightly higher up, in line with a 61.8% Fibo, a deeper correction to the higher structure will offer a better discount in seeking a downside extension to the daily demand area between 1.4750 and 1.4695.

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

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