EUR/CAD Price Forecast: Trapped in a range, breakout required for directionality
- EUR/CAD oscillates within a ten-week range – the trend is sideways.
- A breakout higher or lower would be required to alter the trend to something more directional.
EUR/CAD is bouncing down a ten-week corridor that has a floor at 1.4890 and a sloping ceiling in around the 1.5100s. That is to say that the pair is in a range-bound, sideways trend on a short and medium-term basis.
Long-term the trend is bullish.
EUR/CAD Daily Chart
It will probably continue in its range until it decisively breaks out either higher or lower. The fact it is in a longer-term uptrend would normally marginally favor an upside breakout but the range’s flat bottom cancels out the bullish bias because it marginally favors a downside break. Overall there is no obvious bias.
In the event of a breakout higher the pair will probably rise up to a target at 1.5319, the Fibonacci 61.8% extrapolation of the height of the range higher. A decisive break would be one accompanied by a longer-than-average green candlestick that broke clearly above the top of the range and closed near its high, or three green candlesticks that broke above the top of the range.
Alternatively, a decisive break below the floor of the range is also possible and such a move would probably reach 1.4690, the 61.8% Fib extrapolation lower.
Author
Joaquin Monfort
FXStreet
Joaquin Monfort is a financial writer and analyst with over 10 years experience writing about financial markets and alt data. He holds a degree in Anthropology from London University and a Diploma in Technical analysis.
