Market News & Analysis

Top Story

Featured Trade: EUR/CAD may resume its medium-term up move cycle

 Short-term technical outlook on EUR/CAD (Fri 11 Jan)

Key elements

  • The EUR/CAD has staged a pull-back of 580 pips from its 02 Jan 2019 high of 1.5790. The pull-back has managed to stall right at the medium-term ascending trendline support in place since 24 Oct 2018 low of 1.4777 and formed a daily “Bullish Piercing” reversal candlestick pattern on 09 Jan 2019. These observations suggest that the medium-term up move cycle from 03 Oct 2018 low remains intact within a longer-term major bearish “Ascending Wedge’ corrective range configuration in place since Aug 2012 low of 1.2130 (see daily chart).
  • After it hit a high of 1.5305 on 10 Jan 2019 (also coincides with the minor swing high areas of 04/07 Jan 2019, the pair has started to pull-back to print a low of 1.5201 seen in yesterday, 10 Jan U.S. session. The on-going pull-back in price action has reached 61.8% Fibonacci retracement of the recent push up from 09 Jan 2019 low of 1.5415 to 10 Jan 2019 high. In addition, the hourly Stochastic oscillator has traced out a bullish divergence signal at its oversold region. These observations suggest that the downside momentum of the recent slide/pull-back has started to wane (see 1 hour chart).
  • The next significant near-term resistance stands at 1.5370/5400 which is defined by the former minor range support from 20 Dec 2018/03 Jan 2019 and a Fibonacci cluster (38.2% retracement of the minor pull-back from 02 Jan 2019 high to 09 Jan 2019 low & 1.236 expansion of the recent push up from 09 Jan 2019 low to 10 Jan 2019 minor high projected from 10 Jan 2019, U.S. session low).

Key Levels (1 to 3 days)

Intermediate support: 1.5210

Pivot (key support): 1.5145/30

Resistances: 1.5310 & 1.5370/5400

Next support: 1.4760


If the 1.5145/30 pivotal support manages to hold, the EUR/CAD is likely to resume its potential impulsive upleg at least in the short-term to retest 1.5310 before targeting the near-term resistance of 1.5370/5400.

On the other hand, a break below 1.5145/30 negates the bullish tone for a slide back towards the 03 Oct 2018 medium-term swing low of 1.4760.

Charts are from eSignal

From time to time, GAIN Capital Australia Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.