FX Watchlist: Downtrend Bounce in EUR/CAD

We’ve acquired fairly a number of bearish technical arguments displaying up on EUR/CAD which will align with a possible shift in direction of constructive broad threat sentiment.

Downtrend Bounce in EUR/CAD

EUR/CAD Daily Forex Chart
EUR/CAD Each day Foreign exchange Chart

At the moment, we’re trying out the longer-term chart in EUR/CAD, which has been in a stable downtrend all yr.  The bears have doubtless been benefitting from the broad restoration in Canada & oil costs (WTI futures up 54% YTD) from the pandemic, whereas the euro continues to see points with pandemic instances and different points hurting Europe just like the current energy crisis.

It seems to be like these themes should not prone to change anytime quickly, and with the rise of the Omicron variant suppressing constructive threat sentiment over the previous month, the downtrend in EUR/CAD seems to be extra favorable to play at higher costs.

At present ranges, the market is retesting the Fibonacci retracement space of the latest robust transfer decrease from roughly 1.5100 – 1.4200, which occurs to line up with the falling 100/200 transferring averages. We will additionally see a slight bearish divergence forming between the stochastic indicator and value motion.

General, with a stable technical argument that would attract sellers, enjoying the downtrend seems to be like stable play IF broad threat sentiment can flip round. And currently, we’re getting headlines which are beginning to shift the notion on Omicron (Omicron study in U.K. bolsters evidence of lower hospital risks), in addition to information that covid treatment pills for top threat sufferers are beginning to be accredited to be used. If we proceed to see this pattern within the headlines, then the danger sentiment and bullish CAD sentiment may probably enhance.

What do you all suppose? Is that this the short-term prime for EUR/CAD? Will pandemic information begin to shift positively and convey again risk-on merchants? Or will EUR/CAD creep on greater for now? Let me know within the feedback part under!

This content material is strictly for informational functions solely and doesn’t represent as funding recommendation. Buying and selling any monetary market includes threat. Please learn our Risk Disclosure to be sure you perceive the dangers concerned.

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