EUR/CAD surged on Monday, after it ended Friday near the 1.5210 support zone. The pair is trading above the prior downside channel that contained the price action from mid-March until the 6th of June, within a new short-term upside channel. Thus, we would consider the near-term outlook to be positive for now.
If the bulls maintain their momentum, we would expect them to challenge the 1.5360 resistance zone soon, and if they prove strong enough to overcome it, then we may see them pulling the trigger for our next resistance of 1.5430. Another break above that level could see scope for some more upside extensions, perhaps towards the 1.5470 level, defined by the inside swing low of the 30th of April.
Taking a look at our short-term momentum studies, we see that the RSI rebounded from near its 50 line, while the MACD, although below its trigger line, is showing signs of bottoming within its positive territory. It could cross above its trigger line soon. These indicators reveal upside momentum and support somewhat the case for EUR/CAD to continue trading north for a while more.
On the downside, a dip below the lower end of the new short-term upside channel is the move that would make us abandon the bullish case and take the sidelines. Such a move could pave the way towards the 1.5210 support level. If that level does not hold and breaks, then we may have the completion of a failure swing top, which could turn the short-term outlook negative and perhaps see scope for extensions towards our next support territory of 1.5110.
Disclaimer:
The content we produce does not constitute investment advice or investment recommendation (should not be considered as such) and does not in any way constitute an invitation to acquire any financial instrument or product. JFD Brokers, its affiliates, agents, directors, officers or employees are not liable for any damages that may be caused by individual comments or statements by JFD Brokers analysts and assumes no liability with respect to the completeness and correctness of the content presented. The investor is solely responsible for the risk of his investment decisions. Accordingly, you should seek, if you consider appropriate, relevant independent professional advice on the investment considered. The analyzes and comments presented do not include any consideration of your personal investment objectives, financial circumstances or needs. The content has not been prepared in accordance with the legal requirements for financial analyzes and must therefore be viewed by the reader as marketing information. JFD Brokers prohibits the duplication or publication without explicit approval.
FX and CFDs are leveraged products. They are not suitable for every investor, as they carry high risk of losing your capital. You should be aware of all the risks associated with trading on margin. Please read the full Risk Disclosure.