EURCAD is pulling back from its recent climb and is in the middle of a corrective wave to a former resistance area. Price could find support at the 38.2% Fibonacci retracement level around the 1.4100 major psychological mark or make a larger pullback to the 1.4000 major psychological level at the 50% Fib.
Stochastic is already moving up from the oversold area, suggesting that buyers are ready to push the pair back up. Similarly, RSI is starting to climb out of the oversold region, indicating a potential pickup in buying pressure as well.
The 100 SMA is currently above the 200 SMA, which means that the uptrend is likely to carry on. In addition, the 100 SMA seems to be holding as dynamic support just above the 38.2% Fibonacci level. A break below the Fib levels, however, would mean that a reversal is in order.
EURCAD Fundamental Factors
The euro has been under a bit of selling pressure in the past couple of days, due to the IMF’s refusal to give more bailout funds to Greece without debt relief. Germany and most of the creditors are opposed to writing off a part of Greece’s debt or to delaying any repayments unless they see significant reforms in the country. Meanwhile, the Greek government is dealing with public unrest and mutiny within the Syriza political party.
However, the Loonie could be in a weak spot as well since oil prices have resumed their slide recently. News that oil producing nations are set to increase their supply levels could continue to weigh on prices, which would mean lower revenues for the oil-dependent Canadian economy.
Euro zone flash CPI readings are on today’s schedule, along with consumer spending data from France and Germany. As for Canada, the monthly GDP reading for May is lined up today and a bleak figure could mean more losses for the Canadian dollar.
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