EUR/CAD: Unfamiliar pair? Familiar set up…

After a week of hard-fought gains and higher lows in the EUR/CAD, the Euro has weakened slightly against the Canadian Dollar and corrected lower intraday. After exhausting at the resistance of the Forecast area between 1.3575 and 1.3603 (F)–which projected the upside target following the Rising Wedge continuation–prices are moving lower in what likely is intraday profit-taking.

7-29-2010 DAILY FOREX.png

The EUR/CAD has returned lower through the upper trend line, and is now testing support around 1.3550. After dipping lower to the 38.2% Fibonacci Retracement at 1.3530 and finding buying momentum, prices are trading around the 23.6% Fibonacci level, which overlaps with 1.3550.

Since the daily chart is strong, that bullish sentiment will be reflected by traders buying into the intraday pullback in expectation of a continuation of the uptrend. The market direction on the 30-minute chart is a narrow-ranging accumulation cycle, as confirmed by the one-bar Initial Trend reading. This suggests that the current consolidation between the 23.6% and 50% Fibonacci levels will continue.

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