EUR/CAD traded in a consolidative manner on Wednesday and Thursday morning, staying within a very short-term range that’s been in place since April 29th, between 1.3470 and 1.3593. In the bigger picture though, the stock remains below the downside resistance line drawn from the high of March 10th, and thus, we will maintain our bearish view.
A clear and decisive dip below 1.3470 could initially target the 2.3390 zone, marked by the low of April 29th, the break of which would confirm a forthcoming lower low on longer-term timeframes and perhaps encourage the bears to push the action towards the 1.3255 zone, marked by the inside swing high of April 24th, 2015, at 1.3255. If they are not willing to stop there either, then we may experience negative extensions towards the 1.3075 zone, which provided decent support between April 16th and 23rd.
Shifting attention to our short-term oscillators, we see that the RSI lies slightly below 50, while the MACD runs fractionally below zero, fractionally above its trigger line, and points sideways. Both indictors detect lack of directional momentum and thus, we would prefer to wait for a move below 1.3470 before we start examining whether the prevailing downtrend could be extended.
On the upside, we would like to see a clear break above 1.3768 before we start examining the bullish case. The rate will already be above the downside resistance line drawn from the high of March 10th, while the break will confirm a forthcoming higher high on the daily chart. This may encourage advances towards the 1.3870 zone, the break of which could carry extensions towards the high of March 31st, at 1.3980. If the buying does not stop there, then a break higher could open the path towards the high of March 17th, at 1.4075.
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