Euro Cross Pick 09.14.2011
The rebound in the EUR/CAD looks poised to gather pace as the relative strength index bounces back from oversold territory, and the exchange rate may make another run at the 38.2% Fibonacci retracement from the 2008 high to the 2010 low around 1.4380-1.4400 as the euro-loonie appears to have carved out a near-term bottom just ahead of the July low (1.3407). In turn, we should see the pair work its way back above the 23.6% Fib around 1.3630-50, but I will sit on the sidelines for the time being as the DailyFX Speculative Sentiment Index currently stands at 2.04. Should we see the SSI ratio narrow in the days ahead, I will look to play the broad range in the EUR/CAD, and the exchange rate may continue to trend sideways for the remainder of the year as it breaks out of the upward trend from earlier this year.
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