Is EURCAD ready to resume the DownTrend?
In recent days, the EUR/CAD pair has exhibited notable fluctuations on the daily chart. After reaching the 1.5170 level, a significant resistance point in recent years, the price began to weaken and entered a consistent decline. This area served as a crucial psychological and technical barrier, leading to increased selling pressure. The price subsequently fell below the sideways support at 1.4900, indicating a short-term reversal. The decline continued aggressively, breaking through the 1.4610 support level, another key point on the daily chart, underscoring the strength of the sellers.
Following this sharp decline, the pair experienced a pullback, returning to the previously broken 1.4900 area. This region, which had acted as support, now functions as significant resistance. This zone aligns with the 61.8% Fibonacci retracement level, drawn from the high of 1.5170 to the low of 1.4483, further emphasizing its technical importance. Given these factors, the expectation is for the EUR/CAD to continue its downward trend in the coming days.
Potential Sell Trade
A favorable selling opportunity may arise if the price closes below 1.4870 on the daily chart. Such a move would confirm rejection in the 1.4900 area and pave the way for further declines.
Sell Details:
Possible Entry Point: Close below 1.4870.
Stop Loss: Above 1.4980, representing a risk of 110 pips.
Take Profit: Near the 23.6% Fibonacci retracement level at 1.465, with a potential gain of 220 pips.
Alternative Scenario: Bullish Resumption
If the price does not close below 1.4870 and instead breaks the recent candle's high, we may see EUR/CAD retest the 1.5170 region. Such a move would invalidate the short-term bearish outlook and could attract new buyers.
It's important to note that the market is closely watching the Bank of Canada (BoC) interest rate decision today, with expectations of a 0.5% cut, reducing the rate from 3.75% to 3.25%. This could weaken the CAD, favoring an increase in EUR/CAD. Conversely, if the cut is smaller than anticipated (e.g., 0.25%) or does not occur, it may accelerate the pair's downward movement, given that sellers are already in control.
In Summary
The EUR/CAD is at a critical juncture, facing strong technical resistance at 1.4900 and showing signs of rejection at the 61.8% Fibonacci level. The likelihood of a decline strengthens, especially if the price closes below 1.4870, with target levels at 1.4645 (the 23.6% Fibonacci). However, traders should also consider the alternative scenario of breaking the recent high and advancing to 1.5170. Close monitoring of price action and the BoC announcement is essential for making informed trading decisions, as this could significantly impact the pair's direction.
Disclaimer
74% of retail investor accounts lose money when trading CFDs with this provider. Consider whether you understand how CFDs work and if you can afford the high risk of losing your money. Past performance is not indicative of future results. Investment values may fluctuate, and you may not recover your initial investment. This content is not intended for residents of the UK.
Following this sharp decline, the pair experienced a pullback, returning to the previously broken 1.4900 area. This region, which had acted as support, now functions as significant resistance. This zone aligns with the 61.8% Fibonacci retracement level, drawn from the high of 1.5170 to the low of 1.4483, further emphasizing its technical importance. Given these factors, the expectation is for the EUR/CAD to continue its downward trend in the coming days.
Potential Sell Trade
A favorable selling opportunity may arise if the price closes below 1.4870 on the daily chart. Such a move would confirm rejection in the 1.4900 area and pave the way for further declines.
Sell Details:
Possible Entry Point: Close below 1.4870.
Stop Loss: Above 1.4980, representing a risk of 110 pips.
Take Profit: Near the 23.6% Fibonacci retracement level at 1.465, with a potential gain of 220 pips.
Alternative Scenario: Bullish Resumption
If the price does not close below 1.4870 and instead breaks the recent candle's high, we may see EUR/CAD retest the 1.5170 region. Such a move would invalidate the short-term bearish outlook and could attract new buyers.
It's important to note that the market is closely watching the Bank of Canada (BoC) interest rate decision today, with expectations of a 0.5% cut, reducing the rate from 3.75% to 3.25%. This could weaken the CAD, favoring an increase in EUR/CAD. Conversely, if the cut is smaller than anticipated (e.g., 0.25%) or does not occur, it may accelerate the pair's downward movement, given that sellers are already in control.
In Summary
The EUR/CAD is at a critical juncture, facing strong technical resistance at 1.4900 and showing signs of rejection at the 61.8% Fibonacci level. The likelihood of a decline strengthens, especially if the price closes below 1.4870, with target levels at 1.4645 (the 23.6% Fibonacci). However, traders should also consider the alternative scenario of breaking the recent high and advancing to 1.5170. Close monitoring of price action and the BoC announcement is essential for making informed trading decisions, as this could significantly impact the pair's direction.
Disclaimer
74% of retail investor accounts lose money when trading CFDs with this provider. Consider whether you understand how CFDs work and if you can afford the high risk of losing your money. Past performance is not indicative of future results. Investment values may fluctuate, and you may not recover your initial investment. This content is not intended for residents of the UK.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.