EURCAD price action suggests we are building a base above 1.343 and that yesterday marked an important cycle low for EURCAD.
Yesterday’s low could in deed mark a cycle low to favour near-term gains. The two recent troughs (purple arrows) are above the 5th May trough to further suggest there are buyers down at these lows and at time of writing we rest above the daily pivot. In fact the daily pivot could be used as our bullish / bearish bias for this session.
Additionally the bounce higher from the 1.343 low was aggressive and broke above a prior swing high to also suggest a change in trend is on the cards. There are also several areas of support between 1.340-43 which include the Monthly Pivot and Weekly S1 which, when combined with the Rikshaw Man Doji, further suggests a cycle low has been seen.
If we see an eventual break below 1.34 then we can assume a topping pattern has been confirmed and to refer to the short side on lower timeframes.
German consumer confidence is due out but a more likely driver for the pair will come from Bank of Canada’s rate decision. Whilst rates are expected to remain on hold we would require a dovish statement to help EURCAD towards 1.357 target, whereas a surprisingly hawkish statement should result in a break below the daily pivot.