EURCAD Bounces on Moving Averages Bullish Cross; Neutral Bias in Near Term

Technical analysis of Forex market

EURCAD has been losing ground over the last four days but its sideways move since the end of August remains intact, keeping the short- and medium-term pictures neutral.  The price is currently hovering near the 20- and 40-day simple moving averages (SMAs) which try to complete a bullish cross.

According to the MACD, the momentum in the price could remain weak as the indicator softens near its red trigger line. The RSI seems to be turning slightly higher, though, it is still relatively close to its 50 threshold. Yet, positive corrections cannot be excluded as long as the price remains above its moving averages.

A reversal to the upside could stall at the upper surface of the Ichimoku cloud at 1.4610. Further above, the 23.6% Fibonacci retracement level of the downward wave from 1.5640 to 1.4410 at 1.4705 and the 1.4720 hurdle could also provide resistance. More gains could see a pause at 1.4770 and then at 1.4860, while above the latter the price could hit a significant obstacle around the 38.2% Fibo of 1.4880.

– advertisement –

In the negative scenario, where the negative run in the price extends below the moving averages, immediate support could be found within the 1.4410 – 1.4450 area. Below that, the pair could reach the next psychological levels of 1.4400, and 1.4300, continuing the long-term bearish structure.

Summarizing, EURCAD holds a neutral profile both in the short and medium-term timeframes and a negative outlook in the long-term.