Technical Analysis – EURCAD remains negative overall despite short-term sideways market  


Anthony Charalambous, XM Investment Research Desk

EURCAD is still finding difficulty to steer beneath the 1.4564 level, which is the 23.6% Fibonacci retracement of the down leg from 1.4994 to 1.4432. The pair has consolidated after printing failed breaks of the weekly uptrend line, where a rally then followed to the 50.0% Fibo of 1.4713.

Short-term oscillators suggest that negative directional momentum is starting to pick up, even though the 40-day simple moving average (SMA) has flattened. The RSI – already in bearish territory – is pointing lower, while the MACD looks ready to fall below its red trigger line, which would be a negative signal.

If the bears manage to penetrate below the challenging support barrier of 1.4555, which also encapsulates the 23.6% Fibo, the sellers could push for the weekly uptrend line presently around 1.4520. Breaking that line, the bears could gain strength and drop the price to re-test the recent twenty-nine-month low of 1.4432.

On the upside, if buyers take control, initial resistance could come from the 38.2% Fibo of 1.4647. Moving higher, the 40-day SMA at 1.4685, could hinder a test of the upper boundary of the range at 1.4713, which coincides with the 50.0% Fibo. Surpassing the boundary, the 61.8% Fibo of 1.4780 may unfold once the 1.4750 resistance is defeated.

Summarizing, the medium-term negative view continues.