EUR/CAD poised for a rally?
Fawad Razaqzada March 15, 2019 12:26 PM
Here’s a daily chart of the EUR/CAD:
Source: TradingView and FOREX.com
Despite the data out just a few moments ago that Canadian manufacturing sales rebounded by a good 1.0% (vs. 0.4% expected), the medium-term lower highs and the lack of a clear short-term trend, we think this FX pair is looking bullish for these reasons:
- There has been around 6 bearish-looking daily candles in as many days, yet we haven’t seen any downside follow-through. This is telling us that the bearish momentum is weakening and that a short squeeze rally could be on the cards.
- Support around 1.5050 (old resistance) has been defended on daily closing basis for several days.
- Price above 21-day exponential moving average
- It may have already formed a higher low in the last week of February around 1.4880, relative to its previous low at 1.4760 hit in October of last year.
- Price has been making longer-term higher lows and higher highs since bottoming out in August 2012.
So, we are anticipating a bullish breakout in the EUR/CAD for the above technical reasons. However if the 1.5050 support gives way then, in that case, we will reconsider our short term bullish view.
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.