EURCAD recently broke below the support around the 1.4350 minor psychological level and reached a low of 1.3800 before pulling back up. Applying the Fib tool on the latest swing high and low shows that the 38.2% level lines up with the broken support, which might now hold as resistance.
The 100 SMA just crossed below the longer-term 200 SMA to indicate that the path of least resistance is to the downside. These moving averages are closer to the 50% Fib, which might also serve as a ceiling.
Stochastic is still on the move up to show that buyers are in control of price action for now. Once the oscillator reaches the overbought zone and turns lower, selling pressure could return and push EURCAD to the previous lows.
There have been no reports from both the euro zone and Canada recently, as price action seems to have taken its cue from the updates in the Italian banking crisis and crude oil movements. However, the Loonie seems to be shrugging off recent gains in the commodity as traders still have doubts that the OPEC deal would be effective.
Only low-tier reports are lined up from the euro zone today, and these are data on private loans, M3 money supply, and the Italian 10-year bond auction which might provide some insight on the country’s finances.
There are no reports lined up from Canada today so Loonie traders could continue to take their cue from oil prices or risk sentiment. So far, it seems as though higher-yielding currencies have been on the back foot as traders prefer safe-havens.
By Kate Curtis from Trader’s Way