Suggestion for Trade: Sell if the 4-hour candle closes below 1.4540, SL above trendline @ 1.4560, target 1.4300
EUR/CAD yesterday closed just above key trendline support at 1.4573 and is likely to continue downward movement today amid Eurozone growth pessimism and weaker EUR following Fed tapering decision.
Major Support & Resistance Levels
At the moment of writing the pair is being traded at 1.4545 during Asian session where it is expected to face a strong support around 1.4540-47 (trendline support + 100 MA at four hour chart). A 4-hour close below this support area may push pair into stronger bearish trend opening doors for 1.4336 (200 MA @ 4-hour), 1.4298 (55 DMA) and finally 1.4185 (38% fib level).
On upside, the pair is likely to face immediate hurdle at 1.4547 (100 MA @ 4-hour), ahead of 1.4600 (psychological level + 55 MA @ 4-hour). A four hour close above 1.4600 may accelerate the upward surge up to 1.4690 or even beyond.
MACD shows negative divergence at hourly timeframe which means more downside risk is still there. Relative Strength Index (RSI) is dipping towards oversold territory at hourly timeframe; however, it is still neutral on 4-hour and daily chart suggesting long dips might be in play in near future. It is pertinent that 55 MA is still well above 100 MA and 200 MA on different timeframes that means bullish sentiment is still present.
German GFK Consumer Confidence Survey is due in Asian session; analysts are expecting no change this time around. Similarly investors will also be waiting for Canadian Consumer Price Index (CPI) that too is likely to remain unchanged. In addition, Fed’s recent tapering decision will also be playing in the minds of traders due to which dollar may continue its bullish momentum, thus EUR/CAD may take more dips.