Dukascopy
Short

EUR/CAD 4H Chart: Meets Medium Resistance

FX:EURCAD   Euro / Canadian Dollar
The common European currency has recently reached the resistance of a rather large scale descending channel pattern against the Canadian Dollar . This resistance has been holding its ground for three times during the last weeks.

The reasons for the various attempts of the Euro to break through can be found in the various support levels below the currency exchange rate. For example the 55 and 100–period simple moving averages together with the lower trend line of a rising wedge pattern have caused short term rebounds.

In regards to the future, the situation is almost going to remain unchanged, as the rate gets squeezed into a short term triangle pattern between the medium term channel’s resistance and various support levels. Afterwards, a breakout to the downside should occur.
Comment:

The forecast for the EUR/CAD turned out to be precise, as the pair did get squeezed into a small triangle and broke downwards, where it rebounded against the combined support of the monthly PP and the 38.20% Fibonacci retracement level at the 1.4695 mark.

As a result an adjustment to the pattern was made, by slightly tilting the trend lines of the previously marked rising wedge pattern.

In regards to the future outlook, the pair is set to find support in the weekly PP at the 1.4815 level. Afterwards a surge up to the 1.4900 mark is likely going to follow.
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