Technical Analysis – EURCAD sets sight on peak despite recent correction

EURCAD continues to focus on the recent 23-month-peak of 1.5817 even after a pullback below the 1.5449 level, which is the 23.6% Fibonacci retracement of the up leg from the 1.4263 to 1.5817.

The picture appears to suggest that further advances could unfold, aided by the recent bullish crossover in the stochastic lines with room to move, as well as the nearing of a bullish cross between the 200-day simple moving average (SMA) and the 100-day one. Moreover, the upward sloping Tenkan-sen line has distanced itself above its blue Kijun-sen line, while the MACD, well into the positive region, holds above its red trigger line.

However, traders need to be aware of the flattened blue Kijun-sen line (at the 50.0% Fibo) and the RSI that has just slipped below the 70 mark, warning of downside corrections.

Heading north, immediate resistance could come from the 1.5657 hurdle ahead of the multi-month top of 1.5817, which coincides with the inside swing low from back in March of 2018. Conquering the summit, the 1.5925 and 1.6076 obstacles from April and March of 2018 respectively could be next to test the ascent.

Otherwise, if sellers push below the 1.5449 level, support could then rest at the 1.5286 low. Steering down, the 38.2% Fibo of 1.5223 and the 1.5146 support from June 2019 could impede the pair from reaching the 50.0% Fibo of 1.5040 and inside swing highs of 1.4994 and 1.4976.

Overall, a positive near-term picture looks to remain if the pair holds above 1.5286, with a close above 1.5817 cementing further advances.

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