Technical Analysis – EURCAD undecided after pullback from 2-year high
EURCAD is currently trading between the 50-period simple moving average (SMA) and the lower Bollinger band, with directional momentum evaporating. The consolidation of the price comes after a drop from the 2-year high of 1.5991. Backing this neutral view is the squeeze in the Bollinger bands and the convergence within the 50- and 100-period SMAs.
Moreover, the technical oscillators suggest a neutral market for now, with dried up momentum. The RSI is flirting with its neutral mark, while the MACD is marginally below zero but above its red trigger line. The stochastics though, lean slightly towards an improving picture as does the upward sloping 200-period SMA.
If buyers manage to push above the mid-Bollinger band and the 50-period SMA around 1.5528, immediate resistance could come from the nearby high of 1.5585, which is the 23.6% Fibonacci retracement of the up leg from 1.4263 to 1.5991. Moving higher, the next obstacle is the upper Bollinger band at 1.5630 ahead of the swing high of 1.5792. Overrunning this too could see the price revisit the 2-year high of 1.5991 and if surpassed, the focus could turn to the 1.6076 and 1.6150 highs from March 2018.
Moving southwards of the 100-period SMA, initial support may be found at the lower Bollinger band around the low of 1.5407 before the 38.2% Fibo of 1.5331. Breaching this, the trough of 1.5214 could prove tough to dive past on the way towards the 50.0% Fibo of 1.5130 and the 1.5014 - 1.4976 support region, where the 200-period SMA resides.Overall, the short-term bias remains positive above 1.5214 and a close either above 1.5792 or below 1.5214 would reveal the near-term direction.
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