Euro, EUR/USD, EUR/CAD - Talking points
- EUR/USD has rallied off the low of the year, fighting off momentum
- EUR/CAD tried to break the recent range but ended where it started
- Bearish momentum is in the background for Euro. Will it re-emerge?
EUR/USD TECHNICAL OUTLOOK
Earlier this month EUR/USD made a new low for the year at 1.15245. It has since rallied back to test a pivot point resistance level at 1.16640 three times, failing to decisively break through. The last attempt to go higher stalled at the 34-day simple moving average (SMA).
This rally has seen bearish momentum pause, as indicated by the price moving above the short term 10-day and 21-day SMAs. Medium and longer term SMAs remain above the market and all have negative gradients. This might suggest that bearish momentum could resume if the price moves below the 10-day and 21-day SMAs and the 10-day SMA moves below the 21-day SMA.
Near term levels to watch on the topside are the pivot point at 1.16640, a previous high at 1.16694 and the 34-day SMA currently at 1.16465. On the downside, the previous lows at 1.15292 and 1.15245 are possible support levels.
Beyond that is the 50% Fibonacci retracement level of the move from 1.06337 to 1.23495 at 1.14916.
EUR/CAD TECHNICAL ANALYSIS
EUR/CAD saw an orderly move lower in October before establishing a recent range of 1.43191 – 1.44266. Yesterday saw both sides of the range broken and then a close within the range again.
The rejection of both sides of the range may indicate that the market is unclear on the next large move for EUR/CAD. The new high of 1.44423 may offer resistance while on the downside, 1.42939 is a potential level of support.
The move lower broke through 3 previous lows at 1.46613, 1.46060 and 1.45825. If the market moves higher again, these pivot points could potentially offer resistance if tested.
Medium and longer term SMAs are above the price and all have a negative gradient. This might suggest that bearish momentum could re-emerge if the price falls below, and stays below the short term, 10-day SMA.
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--- Written by Daniel McCarthy, Strategist for DailyFX.com
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