Technical Analysis – EURCAD challenges familiar support zone

EURCAD is again seeking support around the 200-day simple moving average (SMA) following the recent pullback from a five-month high of 1.5783. The line has been limiting downside corrections since early November, hinting that another rebound at this point is possible as the Stochastics are set for an upside reversal in the oversold area, and the price is trading around the lower Bollinger band.

If the bulls push above 1.5520, the price may advance towards the 20-day SMA (middle Bollinger band), currently around the 61.8% Fibonacci retracement of the 1.5991 – 1.5051 downfall at 1.5630. Additional gains from here would shift the spotlight towards the crucial resistance area of 1.5735 – 1.5783, where any violation may activate more buying until the key 1.5890 barrier.

In the event selling pressure persists, the 38.2% Fibonacci of 1.5400 could quickly block the way towards the November trough of 1.5300 and the 23.6% Fibonacci of 1.5270. Breaking the latter, the pair may head for the long-term barrier of 1.5200.

In the bigger picture, the market maintains a neutral outlook within the 1.5991 – 1.5051 territory.

Summarizing, EURCAD is currently testing a familiar support zone, increasing the case of an upside reversal to 1.5630. Alternatively, a move beneath 1.5400 may confirm another bearish extension. 

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