EUR/CAD 1H Chart: Channel Down

Source: Dukascopy Bank SA
© Dukascopy Bank SA
Although EUR/CAD appears to be trading in a well-defined channel at the moment, there is little room left for the Euro to go lower. The technical indicators are also mostly pointing south, but the fact that the currency pair is fluctuating near an intersection of the four-week and 12-month rising support lines, trumps these bearish signals. Accordingly, while we might see a sell-off from 1.4754/43 after the current rally, the downside is to be limited by a demand area between 1.4685 and 1.4650. The rate is soon expected to breach the red trend-line and set course towards 1.4840, namely the March 27 high. Meanwhile, there are other arguments against a prolonged recovery—the Euro is overbought with 74% of all positions being long.
© Dukascopy Bank SA
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