Technical Analysis – EURCAD forms symmetrical triangle; neutral in short term
Posted on May 30, 2019 at 1:48 pm GMT
Melina Deltas, XM Investment Research Desk
EURCAD has been moving in a symmetrical triangle over the last seven months following the soft rebound on the 1.4750 support level. In the short-term, the market could maintain consolidation if the RSI keeps moving around 50 and the MACD near its zero line. Regarding the trend, this is likely to remain flat in the near-term as the 20- and 40-day simple moving averages (SMAs) continue to lose strength.
An extension to the downside and below the moving averages could meet the area between the rising line and the 1.4925 support ahead of the 1.4880 trough reached February 22. Further down, key level could run towards the 1.4750 area, taken from the bottom on October 2018, penetrating the symmetrical triangle to the downside.
On the other hand, if the pair gains ground, the falling line would be immediate resistance for the bulls around 1.5100. Even higher, a violation of the formation could open the door for the 1.5180 – 1.5210 resistance area.
Regarding the medium-term picture, traders should wait for a completion of the symmetrical triangle for placing orders as the market is lacking direction at the moment.