EURCAD concluded last week with a notable rebound following a substantial bearish candlestick drop, yet sustaining momentum proves challenging. Over the past 14 trading hours, the pair struggles to surpass the high set by the previous week's significant bearish candlestick, indicating potential resistance near 1.4749.
Today, market attention shifts to Canada's building permits data, with economists forecasting a decline of -4.6% compared to the previous growth of 9.3%. This negative projection instills caution among traders, restraining upward pressure on the rebound.
Technically, the 1-hour chart reflects a bullish long-term sentiment, evident as the EMA 50 remains positioned above the EMA 200. However, the proximity of both EMAs signals a potential formation of a death cross, urging vigilance. Additionally, the Bollinger Bands reveal a price close below the lower band, suggesting a possible resistance encounter at the upper band.
Both MACD and RSI indicators portray a bearish sentiment, with the MACD signal line residing below the 0 line. RSI recently entered oversold territory and rebounded, likely facing resistance between the 50% and 60% levels. A breakthrough above the 60% level in RSI could indicate a shift towards bullish sentiment.
Overall, EURCAD experiences a robust bullish correction. Traders await signs such as a breach above the upper Bollinger Band, MACD signal line crossing above the 0 line, RSI surpassing the 60% mark, and a breakout above last week's bullish candlestick high at 1.4749 for potential bullish trend continuation. However, failure to breach these levels may signify a continuation of the prevailing cautious sentiment.
Forecast -4.6% vs Previous 9.3%
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