USD/CAD, EUR/CAD Price: In Limbo After Failing Nearby Reversal Zone
Canadian Dollar Outlook
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EUR/CAD, USD/CAD – Bullish Week
Last week, Canadian Dollar softened slightly against US Dollar and Euro, as USD/CAD closed in the green above 50-day average with a 0.5% gain. Additionally, EUR/CAD closed with nearly 0.9% gain.
Alongside this, since the start of October the Relative Strength Index (RSI) has been moving above 50 on both pairs indicating to the end of the downtrend momentum and the possible start of uptrend move.
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USD/CAD DAILY PRICE CHART (DEC 15, 2017 – OCT 8, 2019) Zoomed Out
USD/CAD DAILY PRICE CHART (JulY 1 – Oct 4, 2019) Zoomed In
From the daily chart, we notice since Sep 3 USD/CAD has been moving in a trendless pattern, creating a higher low with a lower high See the chart (zoomed out). Hence, the price should break above the Sep 3 high at 1.3382 or the Sep 10 low at 1.3134 in order to move in a clear trend.
On Thursday USDCAD buyers rallied the price to its highest level in four weeks. However, the pair changed course eyeing a test of the low end of current trading zone 1.3256 – 1.3357. Any close below 1.3256 could press the pair towards 1.3166. Nevertheless, the daily support levels underscored on the chart (zoomed in) should be kept in focus.
It’s worth noting that, USDCAD could fall towards 1.2920 - this level has been mentioned in our previous updates in different approach. If the price breaks and remains below the neckline of double top pattern residing at the Sep 10 low mentioned above.
On the other hand, any break above the Sep 3 high would negate this pattern. See the chart (zoomed in) to know more about higher trading zone/s with the weekly resistance levels to monitor in a further bullish scenario.
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EUR/CAD DAILY PRICE CHART (Jan 3, 2017– Oct 8, 2019) Zoomed Out
EUR/CAD DAILY PRICE CHART (AUG 12 – Oct 8, 2019) Zoomed In
Looking at the daily chart, we notice on Thursday EUR/CAD rallied to its highest levels in three weeks. In the following day, the price rebounded from the high end of current trading zone 1.4476 – 1.4644.
Thus, EURCAD could be looking for a test of the low end of the zone, contingent on clearing the daily support levels underlined on the chart (zoomed in). Further close below the low end could see the price trading towards the vicinity of 1.4389-79. Although, the weekly support levels in gray should be considered.
That said, any close above the high end of the zone could cause a rally towards the vicinity of 1.4736-27. A close above this level may cause more bullishness towards 1.4818. In that scenario, the daily and weekly resistance area and levels should be watched closely.
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Written By: Mahmoud Alkudsi
Please feel free to contact me on Twitter: @Malkudsi
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.