EUR-CAD Gives Conflicting Signals.

From a long-term perspective, so far this year, the EUR/CAD pair has been mostly in an uptrend. It has risen from the low of 1.2769 at the start of 2011, to the recent high of 1.4349. The price reached that level twice, before pulling back to 1.3433. During the last month, the EUR/CAD advanced from the low of 1.3433, once again approaching the resistance of 1.4376. Repetitive tests of this price level are indicative of mounting bullish pressure. More often than not, situation like this leads to a breakout in that direction, meaning up for the EUR/CAD. Upon closer inspection, though, the most recent, smaller price swings created a possible Head and shoulders reversal pattern. It is wide and loose, but unmistakable. Combined with the large shooting star candlestick pattern, which formed on Tuesday, chances are that the price will go down first before resuming the uptrend. If that happens, we must look at the bullish trendline for support, probably around 1.3650 -1.3700. Technical indicators are of little help here, either conflicting each other or showing neutral reading. Both the 100 SMA and the Ichimoku cloud are flat, with the price oscillating around them, while the MACD just turned positive. Overall picture of the EUR/CAD is bearish short-term and bullish for a longer-term outlook. To read more click

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