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    IronFX Intraday Comment | EUR/CAD | 15/01/2016

    • The dollar traded higher against most of its major counterparts during the European morning Friday, in a light economic calendar. It outperformed CAD, NOK, AUD, NZD, GBP and SEK, while it was down vs JPY. The greenback was virtually unchanged against EUR and CHF.

    • In the absence of any major market moving events, CAD and NOK weakened against the dollar mainly due to the renewed fall in oil prices. Light sweet crude oil dipped decisively below the 30.00 zone and at the time of writing it gyrates around 29.50. The International Atomic Energy Agency is expected to announce today that Iran has fulfilled its obligations under the nuclear agreement. As such, the Western sanctions on the country’s oil exports that have been in place for almost a decade, are expected to be lifted as early as Monday. With Iranian officials having stated that the nation intends to bring its exports back to pre-sanctions levels, market expectations appear to be shifting towards an increase in global oil supply commencing from next week. Also, with the Chinese economic slowdown suggesting that the demand side remains weak, the fall in the two oil-related currencies is unlikely to be temporary. As a result, we would expect both CAD and NOK to remain under selling pressure.

    • EUR/CAD shot up during the European morning Friday, breaking above the resistance (now turned into support) obstacle of 1.5740 (S1). The price structure on the 4-hour chart suggests a short-term uptrend and therefore, I would expect the bulls to maintain their momentum and push the rate up to the psychological figure of 1.6000 (R1). Our short-term oscillators reveal strong upside speed and support the case that EUR/CAD is poised to trade higher, at least in the short run. The RSI emerged above its 70 line, while the MACD stands above both its zero and signal lines and points north. What is more, both the indicators stand above their upside support lines. On the daily chart, I see that on the 3rd of December, the pair rebounded from slightly above the psychological zone of 1.4000. Since then the pair has been printing higher peaks and higher troughs. Given that and bearing in mind the break above the 1.5540 (S2) zone, which is also the peak of the 24th of August, I would consider the longer-term picture to be positive as well.

    • Support: 1.5740 (S1), 1.5540 (S2), 1.5325 (S3)

    • Resistance: 1.6000 (R1), 1.6300 (R2), 1.6500 (R3)

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