The EUR/CAD pair fell during the session on Monday, as we hit a massively negative downtrend line. That downtrend line continue to push the market lower, and as a result the move is one that could be expected. The 1.46 level below has been resistance previously, so I would expect that level to be massively supportive as well. If we can get below there though, I believe that the market will in fact continue to drop and head back down towards the 1.4450 handle, which of course was the recent lows that the market had hit.

The negative candle course is fairly impressive, but there is also a significant hammer at the aforementioned 1.46 level which suggests that breaking below might be a bit difficult. With that, I believe that short-term rallies will be opportunities to sell as long as we can stay below the downtrend line. After all, the Euro has continued to struggle overall, even though the Canadian dollar has been a bit beat up as well.

Two weak currencies, however you have to remember that this is based upon relative strength.

Even though both of these currencies are currently very weak, the reality is that the Euro is a significant trouble, so this is more or less a Europe versus North America play. The European economy has quite a bit of trouble, and as a result the currency should continue to struggle against many other currencies, but especially North American currencies as the US and Canadian economies are going much better recently.

This being the case, I believe that it could be a bit choppy to the downside, but most certainly the downside is the only way you can trade this market as the downtrend has been so strong overall. The 1.4450 level below will be supportive, but ultimately I believe that we continue to go much lower, probably down to the 1.40 handle given enough time. On the other hand, if we do break above the downtrend line and the 1.47 level, I believe that the market will have changed and the trend, and would start to head towards the 1.4950 level.

EURCAD 81214

Related Articles
  1. Retirement

    5 Reasons to Leave Retirement Planning to Your Wife

    Wives live longer than their husbands, so their retirement stakes are higher. Luckily, certain qualities make women especially good at long-term planning
  2. Budgeting

    Quick Cash: 7 Smart (Legal) Ways to Get It

    You suddenly need money for an unexpected expense. What are the most effective, least financially damaging ways to get it?
  3. Investing

    5 Companies Benefiting From Germany's Record Surplus

    A weaker euro is boosting German exports, which have led to a record trade surplus. Here are five German companies reaping the benefits.
  4. Credit & Loans

    How to Recover From Identity Theft

    Identity theft isn't going away, and fixing it can take time and money. But doing nothing isn't an option. Rather than become a victim, it is time to take action.
  5. Savings

    12 Great Ways to Save Money at the Supermarket

    Use these strategies when shopping for food, and you'll save big bucks on your grocery bill
  6. Investing

    10 Surprising Companies That Began as Underdogs

    From fast food to electronics, these success stories give hope to leaders who, despite lacking funds, possess unshakable passion for their underdog brands.
  7. Fundamental Analysis

    Calculating Valuation

    Valuation is the process of determining what an asset is worth.
  8. Retirement

    Top 4 Retirement Cities in Uruguay

    With options from a cosmopolitan capital to a South American St. Tropez, the livin' is easy for expats in this coastal neighbor of Argentina and Brazil.
  9. Economics

    Ukraine-Russian Sanctions: The Gift That Keeps On Giving

    The repercussions of Russia's 2014 invasion of Crimea are nowhere near over. The Ukraine says Russian aircraft are no longer welcome to take off or land in Ukraine's airports.
  10. Budgeting

    Don't Let Halloween Haunt Your Bank Account

    With Halloween celebrations getting ever-more elaborate, families can end up spending a fortune. Here, 10 tips to help keep costs down.
  1. Do lower interest rates increase investment spending?

    Lower Interest rates encourage additional investment spending, which gives the economy a boost in times of slow economic ... Read Full Answer >>
  2. How safe are variable annuities?

    Life insurance companies are facing a challenging environment. Those that sell variable annuities have been able to mitigate ... Read Full Answer >>
  3. Why are mutual funds subject to market risk?

    Like all securities, mutual funds are subject to market, or systematic, risk. This is because there is no way to predict ... Read Full Answer >>
  4. How long do I need to keep income tax records?

    Keep all tax-related records for at least three years. For example, keep your 2015 tax return, filed in early 2016, at the ... Read Full Answer >>
  5. Are bank accounts escheatable?

    If banks are unable to contact account owners at their last known addresses, or receive no response, by law, the accounts ... Read Full Answer >>
  6. Are estate distributions taxable?

    In general, most estate distributions are not subject to income tax. In some cases, however, a distribution from an estate ... Read Full Answer >>

You May Also Like

Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!