Earlier today, EUR/USD increased sharply, increasing to the resistance area created by two important resistances. Will they stop currency bulls and trigger one more move to the downside in the following days?
EUR/USD
The overall situation in the long- and medium-term hasn’t changed much and we’ll focus on the very short-term changes today.
The first thing that catches the eye on the daily chart is invalidation of the breakdown under the green line based on the August and October lows. This positive development encouraged currency bulls to act, which suggests a test of the upper border of the purple declining trend channel and the 38.2% Fibonacci retracement later in the day.
What’s next? Taking into account the above-mentioned resistances and the current position of the CCI and Stochastic Oscillator (they are overbought and very close to generating sell signals), it seems that EUR/USD will reverse and decline in the following day(s). Nevertheless, if we see a breakout above these resistance levels, we’ll consider closing our short positions and taking profits off the table.
Very short-term outlook: mixed with bearish bias
Short-term outlook: mixed
MT outlook: mixed
LT outlook: mixed
USD/CAD
On the weekly chart, we see that USD/CAD remains in the blue consolidation, which suggests that as long as there is no breakout above the upper border of the formation or a breakdown under the lower line, the situation will remain a bit unclear and short-lived moves in both directions should not surprise us.
Will the very short-term chart give us more clues about future moves? Let’s check
Although USD/CAD bounced off the lower border of the purple rising trend channel yesterday, currency bears triggered a reversal and decline earlier today. Will we see further deterioration in the coming days? In our opinion, such price action will be more likely and reliable only if the exchange rate closes today’s session (or one of the following sessions) under the lower border of the purple rising trend channel. Additionally, looking at the buy signals generated by the indicators, another rebound from this area should not surprise us.
