Technical Analysis – EURCAD at a make-or-break point; negative risks linger
EURCAD was hit by a sharp selling wave last week, erasing the sparkle from early April to meet the crucial support zone of 1.4723.
Unless the pair manages to pivot at this point, the bears could gain extra steam likely towards the 1.4580 restrictive zone, while a deeper freefall may seek support around the 1.4455 number.
From a technical perspective, oversold signals are flashing red, but the bears could stay on board in the short term as the fast-Stochastics have yet to change course below the 20 level, while the RSI, although in breathing distance above 30, has yet to cross its oversold level. The MACD also favors additional downside corrections as the indicator continues to decelerate below its zero and signal lines.
If the bulls return to the game, the first target will be the 1.4900 round-level where the lower boundary of the Ichimoku cloud resides and the shorter-term simple moving averages converge. Crawling higher, the 23.6% Fibonacci of the 1.5977 – 1.4700 down leg could cap the rally around 1.5000, deterring any move above the cloud and towards the 38.2% Fibonacci key resistance of 1.5190.Summarizing, EURCAD seems to be at a make-or-break point around 1.4723, while negative risks keep lingering in the background. A decisive close below that threshold could trigger a sharp decline towards 1.4580.
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.