EURCAD has advanced considerably since roughly the beginning of the year, hitting a two-year high of 1.5687 during Thursday’s trading. Price action is at the moment taking place not far below this peak.
The Tenkan-sen line being above the Kijun-sen one is pointing to a bullish short-term momentum. However, the Chikou Span suggests that the recent rally might be overextended, rendering a pullback in the near-term a possibility.
Price advances could meet resistance around yesterday’s high of 1.5687 – including the 1.57 handle that may be of psychological importance – with stronger bullish movement turning the attention to the 1.58 level that could also hold psychological significance.
On the downside, the area around the current level of the Tenkan-sen at 1.5569 might offer support, with a violation of this area increasingly bringing the Kijun-sen at 1.5433 into focus.
The medium-term picture is positive: price action is taking place above both the 50- and 100-day moving averages, as well as the Ichimoku cloud. In addition, both MA lines maintain a positive slope.
Overall, both the short- and medium-term outlooks are looking bullish, with the possibility of an overstretched market in the short-term being in place.
