EURCAD may be on the verge of a reversal, as the pair recently broke below the rising trend line on its 4-hour time frame. Price dipped to the 1.3600 major psychological support upon gapping down over the weekend then quickly filled the gap and pulled up to the broken trend line.
Stochastic is indicating overbought conditions, which means that the correction might already be over and that it’s time for the selloff to resume. EURCAD is currently testing the resistance at the 100 SMA, which is above the 200 SMA and suggesting that the uptrend could still resume.
Meanwhile, RSI is moving up, suggesting that there’s a bit of buying pressure left to trigger more gains for EURCAD. Price could still land back above the trend line resistance and rally back to the 1.4100 levels. EURCAD Forex Forecast – Testing Resistance at Broken Trend Line
EURCAD Fundamental Factors
A big event risk for this EURCAD setup is the Greek IMF deadline today. If the country fails to make its 1.6 billion EUR repayment to the institution, they could wind up defaulting on their loans and leaving the euro zone. This could spur market declines across the globe, as traders weigh in on the potential repercussions to other financial assets.
A last-minute deal for Greece and its creditors could still boost the shared currency, which might mean more gains for EURCAD. After all, the recent slump in oil prices has rendered the Canadian currency much weaker against its counterparts again.
Canada is set to print its monthly GDP reading in today’s US trading session and a positive reading might draw Loonie buyers back to the table. This could lead to a EURCAD selloff to the previous lows at 1.3600 or perhaps even lower, depending on the outcome of today’s Greek events.
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