Technical Analysis – EURCAD breaks sideways pattern to the downside

EURCAD broke to the downside the medium-term sideways range that had been confining the price action in recent months, with an upper bound at 1.4770 and a lower end at 1.4415. The pair is now testing the 3-year low of 1.4350, another violation of which could give the bears more fuel.

Short-term momentum oscillators also paint a bearish picture, with the RSI looking ready to test its 30 line and the MACD moving further beneath its red trigger line and into the negative territory.

If sellers pierce below 1.4350, their next target might be the 1.4240 zone, marked by the lows of March 16, 2016. Another negative break would turn the focus to 1.4050, the level that halted the downfall back in April 2016.

On the upside, the bulls would need to overcome 1.4415 first, which stopped the decline back in September and may now provide resistance. Further up, the lower bound of the former range at 1.4450 would be eyed, with another upside break opening the door for the 50-day simple moving average (SMA) at 1.4556 initially, and then for the inside swing high of 1.4620.

In short, the downward violation of the range has turned the outlook negative, and another break below 1.4350 would reinforce that view.

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.

We are using cookies to give you the best experience on our website. Read more or change your cookie settings.

Risk Warning: Your capital is at risk. Leveraged products may not be suitable for everyone. Please consider our Risk Disclosure.