EUR/CAD Price Forecast: Depreciates to near 1.4800, tests oversold levels
|- EUR/CAD may find immediate support at the psychological level of 1.4800.
- The 14-day RSI signals sustained bearish momentum as it remains slightly above the 30 level.
- The pair may explore the area around a “pullback resistance” at the 1.4870 level.
The EUR/CAD cross struggles to rebound from three consecutive days of losses, trading around the 1.4810 mark during the Asian hours on Wednesday. A technical analysis of a daily chart indicates a strong bearish momentum, with indicators suggesting that sellers are still firmly in control of the market. However, oversold conditions may be approaching, hinting at the possibility of a short-term correction.
On the daily chart, EUR/CAD is trading below the nine-day Exponential Moving Average (EMA), which has been serving as a dynamic resistance line over recent sessions. The nine-day EMA has also diverged below the 14-day EMA, creating a "bearish crossover" that reflects weakening short-term momentum and solidifying the pair’s downward trajectory.
The 14-day RSI, a popular tool for identifying overbought or oversold conditions, currently sits slightly above the 30 level. This placement signals sustained bearish momentum without fully confirming an oversold condition. Should the RSI drop below the critical 30 mark, traders may look for signs of an upward correction. A bounce from oversold conditions could bring the pair back toward the 1.4850-1.4900 range, where sellers may once again test the resilience of any recovery attempt.
On the downside, the 1.4800 mark is acting as a psychological level and could be the first line of defense if selling pressure continues. This level is often pivotal, as psychological levels can attract buying interest from traders hoping for a potential rebound.
If the EUR/CAD cross breaks below 1.4800, the next critical support lies at 1.4700. This level holds significant importance for technical traders, as it could either slow the decline or reinforce the bearish trend if broken decisively. A drop below this level could set the stage for EUR/CAD to approach its seven-month low at 1.4587.
On the upside, the EUR/CAD pair encounters its first hurdle around 1.4870, a level that previously served as support but has now turned into “pullback resistance.” A move above this “throwback” level could indicate that bullish sentiment is emerging, albeit cautiously, among market participants.
Should the EUR/CAD break above 1.4870, attention will shift to the nine-day EMA at 1.4918 and the 14-day EMA at 1.4949. Both levels represent dynamic resistance points and would need to be overcome for any meaningful bullish momentum to develop.
EUR/CAD: Daily Chart
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