Last Thursday I released commentary titled EURCAD Fifteen-Month Uptrend at Risk Below 1.5200. That price marked ascending channel support that extends from the 2017 low.
Although the May 10 session broke below support on an intraday basis, sellers were unable to close the session below the 1.5200 handle.
As such, we were left waiting. Sunday’s forecast reinforced the idea that the pair was vulnerable, but that a breakdown remained elusive.
Fast forward to today, and we can see that the EURCAD has taken out last week’s low at 1.5149. In fact, the pair is currently trading at levels last seen on January 17.
However, just like last Thursday, the key is a daily close below channel support, which is now closer to 1.5220/50. While sellers are undoubtedly in control at the moment, we can’t label this as a valid breakdown until a session close below 1.5220.
Remember, I use New York close charts so that each 24-hour session closes at 5 pm EST. You can go here to get access to the same charts I use.
There’s also another consideration with regard to this EURCAD decline. Since March 20, the Euro cross has carved a descending channel. The pair is testing support at 1.5080 as I type this.
Now, that does not mean that this is a buying opportunity. Far from it, in fact.
It simply tells me that we could see the EURCAD retrace back into the 1.5220/50 area before the next leg lower commences. That is if buyers can produce a bounce from descending channel support at 1.5080.
Otherwise, this smaller channel may not have much significance. Key horizontal support comes in at 1.5000 with a daily close below that targeting the 1.4730/40 area.