EUR/CAD – D1
Our Expectations: It seems that oil growth last week has greatly supported the Canadian who, despite the bad economic data of today, is growing steadily. Technically, EUR/CAD gives us a good positioning position with short positions after breaking a major diagonal of a long-term upward trend. Let’s look at it in detail. The breakdown of the main trendline (dashed) is now real – we have several closed bars under the diagonal, and a test followed by a strong Price Action to downgrade. A bear-pin bar is available at levels of resistance, formed by a basic horizon, a long diagonal pierced, and a short-lived one. 38.2% Fibonacci correction of the new bearish trend is also in favor of short positions. 50 and 200SMA have already formed the Death Cross formation, and this is quite indicative of the price as the formation is highly successful in the past.
Let’s also look at the foundations fundamentally. In terms of EUR, it is already clear that the moods among ECB members are about raising interest rates and ending QE altogether. What is more important for a particular pair, however, is the price of oil that does not have a downward trend. Currently, commodity traders accumulate the worst-case scenario, namely Iran, to put pressure on 30% of global supplies. If we only witness this, we will see extremely strong bullish impulses, both in CAD and in oil.
Alternative Scenario: If the price moves back over the resistance zone and stays there, the negative scenario will be spoiled and more likely to see growth.
Trader Petar Milanov