EURCAD Technical Analysis–Outlook WC 28/1/13
(Forex-FX-4X.com, EUR/CAD Technical Analysis, WC 28th Jan)
- The EURCAD currency pair has seen significant volatility this week and an associated 2.51% weekly basis gain.
- Price ultimately closed the week near the 61.8% Fibonacci retrace of 1.4376 > 1.2127.
- This comes as the USDCAD pair has broken above parity and EURUSD is trading close to the highs from 2012 near $1.35. The euro has seen broad based strength while the CAD has been heavily sold.
- Any shift in sentiment and subsequent EUR/CAD move lower has the 1.3364 area price pivot as a focus as per the weekly (fig 1) chart below.
- When referencing the same weekly chart we note that the 1.3780 area provided support for an extended period around late 2011 and could potentially see an element of resistance if the current bullish momentum takes this pair higher over the coming weeks.
- Large speculators trading futures contracts at the CME (Chicago Mercantile Exchange) increased the net long EUR wager by 300% on a week-to-week basis and hit a net $3.6 billion long EUR position as of the latest reporting period. Over the same period the net long Canadian dollar position was cut; however the high volatility CAD price action was not captured by the latest COT report and the positioning next week will likely reflect the significant Canadian dollar selling seen later last week.