The EUR/CAD has been steadily moving up since the beginning of November after the price found the bottom at 1.5312. At this time, the 200 Simple Moving Average was rejected, after which the price broke above the 20 EMA as well as the top of the descending channel.
The correction down followed, and yet again, 200 SMA got rejected, and EUR/CAD produced a new higher high, suggesting the validity of an uptrend. Last week, the price found the resistance near 1.5340, but on the other hand, it found the support near 1.5600 psychological level. This is where the previous resistance was formed, and now it is clearly acting as the support.
Therefore, as long as the price remains above 1.5600, the uptrend continuation is likely to take place. It might result in a price increase towards 1.5900, which is another strong psychological as well as technical resistance level. This is because it’s confirmed by 3 different Fibonacci retracement levels. The first is 88.6% Fibs applied to the July-November correction, the second is 23.6% Fibs applied to the last wave up when price topped out back in July, and the third is 627.2% Fibs applied to the correction down after price broke above the 20 EMA.
This makes the growth potential of nearly 250 pips, while the uptrend might last 2 or 3 weeks. The reason for this is the crossing time of the extended descending channel and the 1.5900 resistance, which is on January 12. This might be the time when the currently ongoing upside swing will end and a new, potentially bearish cycle will start.
On the downside, if/when the 1.5600 support will get broken, the bullish forecast will become significantly less probable and the downside move towards the 1.5450 support area will likely be the case.
Key support levels: 1.5600
Key resistance levels: 1.5740, 1.5835, 1.5900
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Disclaimer: The analysis presented in this article is for educational purposes only and should not be considered as financial advice
The correction down followed, and yet again, 200 SMA got rejected, and EUR/CAD produced a new higher high, suggesting the validity of an uptrend. Last week, the price found the resistance near 1.5340, but on the other hand, it found the support near 1.5600 psychological level. This is where the previous resistance was formed, and now it is clearly acting as the support.
Therefore, as long as the price remains above 1.5600, the uptrend continuation is likely to take place. It might result in a price increase towards 1.5900, which is another strong psychological as well as technical resistance level. This is because it’s confirmed by 3 different Fibonacci retracement levels. The first is 88.6% Fibs applied to the July-November correction, the second is 23.6% Fibs applied to the last wave up when price topped out back in July, and the third is 627.2% Fibs applied to the correction down after price broke above the 20 EMA.
This makes the growth potential of nearly 250 pips, while the uptrend might last 2 or 3 weeks. The reason for this is the crossing time of the extended descending channel and the 1.5900 resistance, which is on January 12. This might be the time when the currently ongoing upside swing will end and a new, potentially bearish cycle will start.
On the downside, if/when the 1.5600 support will get broken, the bullish forecast will become significantly less probable and the downside move towards the 1.5450 support area will likely be the case.
Key support levels: 1.5600
Key resistance levels: 1.5740, 1.5835, 1.5900
Thanks for your support! If you liked this analysis, please support our profile with a 👍 and follow us to get a new daily analysis.
Disclaimer: The analysis presented in this article is for educational purposes only and should not be considered as financial advice