EUR/CAD broke to the upside of the falling trend line, however, it remains confined near the 23.6% Fibonacci retracement level of the down-leg from 1.6150 to 1.4745, around 1.5075. The pair seems to be in a bullish correction mode as it jumped above 1.5100 and the technical indicators hold in positive territory. The stochastic oscillator is running into overbought zone, while the MACD jumped above the zero line.
Another closing day above the 23.6% Fibonacci mark, could push the pair until the next resistance of 1.5140. A stronger barrier, though, could be found at the 38.2% Fibonacci of 1.5280 since any strong violation of this point could increase chances for further gains probably towards the 1.5320 – 1.5360 resistance area.
However, if prices are unable to break above the 23.6% Fibonacci in the next few sessions, the risk would shift back to the downside, towards the 20- and 40-day simple moving averages (SMA) around 1.4950. The next key support to watch lower down is 1.4845, identified by the recent lows.
In the medium-term, the outlook is changing to a more neutral to bullish one after the penetration of the descending trend line on Monday.
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