In the Forex spotlight today we have EURCAD, which has managed to break below the bottom of the rising price channel as seen on its 4-hour chart. This suggests that we could potentially be in for a deeper drop to test key support at 1.4625.
Should we see a further breakdown below this level, it would signal that the bullish move that started at 1.4548 and peaked at 1.4726 has indeed wrapped up. With the cap put on this upward movement, EURCAD could now switch gears and prompt the next drop aiming to test the cluster of support at 1.4548. Breaching this could pivot the pair towards the 1.4400 area.
However, let’s not discard the upside potential. A potential silver lining lies in the fact that if the 1.4625 support holds its ground, we could see EURCAD spring back for another test at 1.4726 resistance. A successful climb above this level steers the course towards a new targeted resistance at 1.4763.