Aside from the March 10th ECB statement, EURCAD was held to a 500-pip range in the month of March. A monthly range this size doesn’t sound too unusual until we compare it to January and February, which produced 1,150 and 1,250 pips respectively.
Due to this recent sideways price action, the daily chart doesn’t provide many clues, at least not on its own. However, the weekly chart does offer a hint about the pair’s future direction in the form of a 2,800-pip range that has been in place since 2010.
While the six-year ascending channel does an excellent job of painting the “big picture”, it does little to produce an actionable setup. For that, we turn to the daily chart where we find a second channel with a more modest and tradable range.
But before we get to that, I want to point something out about the previously mentioned 1,150-pip range in January.
The monthly chart below shows a large bearish pin bar that formed at channel resistance. Whether this suggests that a retest of channel support is in the cards is anyone’s guess, but it is interesting nonetheless.
Also, note that the April 2015 low was carved out by a bullish pin bar from support. So it would seem that January’s price action isn’t the first time the pair has signaled a major turning point with a candlestick pattern.
As promised, the more actionable setup will come from the daily chart below. The smaller ascending channel combined with the 1.50 resistance level could offer an opportunity following this Wednesday’s BoC statement. While the event could trigger a move in either direction, a stronger Canadian dollar would make for a more favorable opportunity here based on the weekly and monthly charts above.
