Since the start of 2011, the EUR/CAD has been fluctuating within an ever-tightening range. The consolidation point for this trend appears to be just below 1.3600.
Looking over the technical indicators it seems worthwhile to point out that current momentum is bullish and we have what appears to be a relatively clear target at 1.3600 prior to any sharp movements.
This price target is well within reach today. Given the flurry of events on today’s calendar, especially out of the euro zone, there is a strong possibility that the EUR will gain the needed boost to touch this consolidation point.
The Stochastic (slow) on the chart below shows a cross just above the over-sold region, making it a weaker indication of upward mobility, but a bullish signal nonetheless.
The MACD also reveals what could be a bearish cross, countering the limited upward strength shown on the Stochastic indicator.
Since the price is within 100 points of its consolidation target, these conflicting signals make sense. There is enough data to support the upward move towards this point, but not enough to justify breaching that target.
It seems more likely that traders will witness a downturn in the pair once the consolidation price target is reached today. This is also supported by rising Crude Oil prices, which often support the value of the Canadian dollar (CAD).
EUR/CAD – Daily Chart
